The Production-Linked Incentive (PLI) schemes are like a kickstart for industry, commerce and industry minister Piyush Goyal said Saturday, even as he asked the beneficiaries of the schemes to become outward looking and leave the “cosy comfort” of India’s large domestic market.
The minister asked the PLI incentive beneficiary firms to share their “constructive criticism and feedback for better implementation of the scheme”.
“At the same time we are looking for cooperation. Government has its own restraints and constraints also. We have a CAG audit like you have your account audits, (ensure) that the paperwork is complete so that there are no irregularities. That way we will have transparency and fairness,” he said while addressing the PLI beneficiaries.
The government in 2021 announced PLI schemes for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma, with an outlay of Rs 1.97 lakh crore.
More than 1,200 stakeholders, including government officials and industry players are deliberating on the progress of 14 PLI schemes.
Giving the example of a scooter, Gotal said the PLI schemes are like a kickstart
Insisting that the scheme incentives should not be seen as crutches, he said: “We are not looking to make you dependent on government subsidies. This is only like a kickstart like an initial support. You’ll ultimately have to compete”.
The idea is to make India a manufacturing powerhouse and there is a long journey ahead, he said and asked industry to gradually focus on global markets.
“Gradually we must be more outward looking. Over the years we have got into a cost comfort of our large domestic market,” Goyal said, adding that this would add more scale, volumes and help in cost effectiveness.
At the same event, Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh called upon the industry to focus on value addition as India’s manufacturing Gross Value Added (GVA) is about 17.4%. He also said that that there could be some “teething issues” in the scheme with regards to documentation or incentive disbursal, but those are “nuts and bolts” of the story on which the government wants industry’s feedback.
On the present value addition, he said, it is not enough for a country that is looking to become a developed nation and for huge job creation. Local value addition is happening in sectors such as mobile and white goods.
Singh added that certain quarters have raised some problems with regards to the scheme and the government is working to address those issues.
The other concern people talk about generally is that in such subsidy schemes, industry uses the incentive and leave as they invest for a short time to get the subsidy, but “in this case, the scheme design is such” that it is “highly unlikely” that the industry will leave.
“The scheme will help you grow bigger. You will be able to change India’s manufacturing landscape and really bump up our share in the GVA as (at present) it is really far too low for an economy that is trying to achieve a developed nation status in the next 25 years,” Singh said.
