Govt notifies PLI scheme of Rs 6,238 crore for white goods

Under the scheme, eligible investors in air-conditioners, LED lights and such components will get incentives of 4-6% on incremental sales (to be calculated over the base year of 2019-20) of products manufactured in India. The total incentives of Rs 6,238 crore will be disbursed over five years.

The government on Friday notified a Rs 6,238-crore production-linked incentive (PLI) schemes for white goods under which companies will have the choice to start investment in either FY22 or FY23 and benefits will be extended accordingly. The notification by the department for the promotion of industry and internal trade (DPIIT), however, made it clear that mere assembly of finished goods won’t qualify for the benefits.

Under the scheme, eligible investors in air-conditioners, LED lights and such components will get incentives of 4-6% on incremental sales (to be calculated over the base year of 2019-20) of products manufactured in India. The total incentives of Rs 6,238 crore will be disbursed over five years.

The incentives will flow in from the next fiscal at 6% (if the investments start from FY22) and will be reduced to 5% by FY25 and then to 4% in FY27.

Commerce and industry minister Piyush Goyal had earlier said the value addition for the AC industry was estimated to rise from the current 20-25% to 75% after the implementation of the scheme; in LED lights, it would jump to 70-75% from 40%.

The application window for the scheme would remain open from June 15 to September 15. If the applicant doesn’t meet the criteria for incremental sales or investments in a particular year, he won’t be eligible to get incentives for that year.

This is part of the 13 PLI schemes, announced by the government in the wake of the Covid-19 pandemic last year, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, stood at Rs 1.97 lakh crore over a five-year period. The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.

The PLI scheme for white goods is expected to pave the way for an incremental investment of Rs 7,920 crore, production of Rs 1,68,000 crore and exports of Rs 64,400 crore. It’s also estimated to earn the government direct and indirect tax revenues of Rs 49,300 crore and create additional four lakh direct and indirect jobs.