Centre mulls minor tweaking in PLI scheme, aims to boost manufacturing

Discussions underway regarding the potential need for slight alterations to the production-linked incentive scheme to improve its execution

The Centre is in consultations to determine whether ‘minor tweaking’ is required in some of the production-linked incentive (PLI) schemes for its smooth implementation to boost domestic manufacturing, a senior government official said on Thursday.

The official, however, did not point out any potential change that is being considered since the consultations with respective ministries are yet to conclude.

The government will also respond to industry suggestions, such as ensuring quick processing of PLI claims, addressing delays in environmental clearance at the state level, and resolving delays in visa processing for Chinese vendors involved in component manufacturing in India.

These topics were discussed during the PLI scheme review by the empowered group of secretaries, led by Cabinet Secretary Rajiv Gauba. The meeting primarily focused on sectors that have been performing fairly well.

“Today, we covered sectors that are generally doing well, such as pharmaceuticals, mobile manufacturing, and white goods, among others. Sectors that have not fully taken off will be reviewed later,” the aforementioned official stated.

Some suggestions from the respective ministries implementing the scheme will be converted into policy decisions, according to the official.

There will soon be another round of meetings to review PLI sectors where incentive payouts have been slow, including areas like steel, textiles, and solar PV.

In FY23, the Centre had paid incentives amounting to Rs 2,874 crore to PLI beneficiaries across eight sectors — mobile manufacturing, IT hardware, pharmaceutical drugs, bulk drugs, medical devices, telecom, food products, and drones.

The estimated outlay for the PLI scheme during its third year of implementation, FY24, is expected to reach approximately Rs 13,000 crore. The incentive payout for FY25 is projected to hover around Rs 23,000-24,000 crore, Business Standard had earlier reported.

The Centre has begun renewing talks with companies shortlisted under the PLI schemes to identify and promptly resolve any challenges they may be facing. The Department for Promotion of Industry and Internal Trade has been tasked with nudging ministries to consult with PLI beneficiaries.