The government has finalized two Production Linked Incentive (PLI) schemes worth over Rs 7,000 crore to promote manufacturing of toys and cycle parts in the country.
People aware of the matter told BLiTZ that Rs 3,489 crore is expected to be allocated for the PLI scheme for toys and Rs 3,597 crore for cycle parts. A cabinet note in this regard has already been issued.
“As soon as we get cabinet nod for these two schemes, we will start the process of finalizing the rules,” said a person. Also, there is a plan to complete the scrutiny of applications by the end of the next financial year.
The products have been identified and recommended by the steering committee constituted to improve local value addition and exports. The committee comprises top industrialists, officials from the Ministry of Commerce and Industry and other government departments.
With the first phase of schemes receiving a good response, the industry was expecting at least half a dozen new schemes to be announced in the Union Budget in February. However, not a single new scheme was mentioned in the budget.
Commerce and Industry Minister Piyush Goyal had said that the Finance Ministry is regularly allocating funds for PLI. Talking to BLiTZ ahead of the budget, Goyal had said, “It is actually a cabinet process to approve a scheme and issuing guidelines is a ministerial process.” We have brought many PLIs and many more are going to come through the cabinet. There are preparations for many PLIs right now.
The finance minister has already provided Rs 1.97 lakh crore for PLI schemes and Rs 76,000 crore for semiconductors. The above official said that there will be no additional budgetary allocation for the two new schemes. In the first phase of these schemes, an allocation of over Rs 7,000 crore will be made with an estimated savings of around Rs 11,848 crore.
The scheme has been designed in such a way that the incentive amount will be given in installments to the PLI beneficiaries or companies. For example, out of 14 PLI schemes launched by the government so far, for 7 schemes, a mere Rs 4,000 crore will be paid to the beneficiaries by the end of the current financial year.
Another official said the impact of the government’s expenditure on the scheme would be visible in the next two years when production would be in full swing.
