In a first, Centre to review PLI scheme to sort out teething issues

Interactions with ministries lined up to seek feedback

The government will hold a first-of-its-kind review and seek feedback to resolve the teething issues that beneficiaries of the production-linked incentive (PLI) scheme are facing.

A meeting on this will be held on June 27 and it will be chaired by Commerce and Industry Minister Piyush Goyal. It will have participants from all 14 ministries involved in rolling out the scheme, which aims to make India a manufacturing powerhouse, people aware of the matter told Business Standard. “Key beneficiaries of the scheme are expected to be at the meeting. A workshop will be conducted on this,” one of the people quoted above said.

“The idea is to have a detailed discussion on the scheme’s implementation as well as seek feedback from industry and other government departments,” the person said, adding that this was the first time such an exercise would be held by the minister. This is different from the meetings of the Cabinet secretary-headed empowered group of secretaries.

The meeting will take place against the backdrop of implementation challenges being faced by PLI beneficiaries. For instance, in the case of the one for automobiles, firms are awaiting clarity on the incentives they are supposed to receive. The Department of Heavy Industries is looking into the matter. Of the 14 PLI schemes, 13 are operational. The exception is steel, which has seen major delays.

“The issues pertaining to steel have been sorted out and the scheme should be implemented soon,” the person quoted above said.

During FY23, the claims under the PLI scheme stood at Rs 3,420 crore, of which the government has paid Rs 2,874 crore to beneficiaries in eight sectors — mobile manufacturing, IT hardware, pharmaceutical drugs, bulk drugs, medical devices, telecom, food products, and drones, according to the data shared by the industry department in April. 

This means 1.4 per cent of the Rs 1.97 trillion, which has been allocated for five years towards the scheme, has been paid by the government as incentives.

While the disbursement of incentives was initially expected to triple to almost Rs 8,083 crore in FY24 — the third year of the implementation of the PLI scheme — the outgo is further expected to touch around Rs 13,000 crore by year-end. This is because the government expects the schemes to pick up, resulting in higher claims from the beneficiaries, two government officials said.

FY24 will be the first year of production for many companies under the PLI scheme, and major claims for incentives will begin in FY25.

In April, a senior industry department official had told reporters the government was trying to address the issues in sectors that were not doing well, take them to a level acceptable to industry, and remove procedural lapses.