Testing times for PLI schemes: Covid-related delays put firms in pressure

Companies have petitioned the government to double the incentive from 2.5 per cent to 5 per cent and extend the tenure

This year, a bevy of companies that qualified under the production linked incentive (PLI) scheme failed to achieve their investment or production value targets or both. This failure in their very first year of the programme is something the government might not have anticipated.

The deadline to claim incentives for the first year ended on March 31, but the companies concerned blamed their problems on the pandemic for disrupting supply chains (the chip shortage being one problem), delaying factory construction. Delayed government permissions meant that PLI-bound companies had less than 12 months to get started.

The hit has been taken by companies