Business Bureau :
THE Production Linked Incentive Scheme (PLI) should be made more liberalised so that the MSME sector can avail its maximum benefits to make better contribution by way of incremental sales, exports and employment, said CA Julfesh Shah while speaking on the newly introduced PLI scheme by the Central Government to boost ‘Aatmanirbhar Abhiyan’. The PLI scheme aims to provide companies incremental incentives on incremental sales (over FY 2019-20) from products manufactured in domestic units. The scheme invites foreign companies to set up units in India, however, it aims to encourage local companies to set up or expand existing units and also to generate more employment, said Shah. The purpose of widening the PLI scheme is to cover more products to protect identified product areas, introduce non-tariff measures that make imports more expensive, acknowledge the relevance of exports in overall growth strategy. It also focuses more on the domestic market to promote manufacturing by offering production incentives and encourage investments both from within and outside.
CA Shah said that initially only 3 sectors were identified for this scheme viz. electronics including mobile phones and allied equipment manufacturing, pharmaceutical ingredients and medical devices. From November 2020 onwards, in addition to the above sectors the scheme has expanded to 10 more sectors namely food processing, electronic/technology products, pharmaceuticals drugs, advance chemistry cell (ACC) battery, telecom, textiles, speciality steel, automobiles and auto components, solar photo-voltaic modules and white goods and LEDs. Companies that are registered in India and are involved in the manufacturing of goods covered under the target segments of the scheme can apply under the PLI scheme. An applicant must meet threshold criteria (i.e. incremental investment) that is a minimum of Rs 10 crore (MSME) or Rs 100 crore (others) and a maximum of Rs 1,000 crore to be eligible of incentive for the year under consideration.
To meet the threshold criteria of ‘Incremental Investment’ for any year, the cumulative value of investment done till such year (including the year under consideration) over the base year (2019-20) would be considered. Some sectors also have threshold criteria for incremental sales. Any additional expenditure incurred by companies on plant, machinery, equipment, R&D and transfer of technology for manufacture in the target segments will be eligible for the incentive scheme. The scheme provides an incentive of 4% to 6% on incremental sales over base year i.e. 2019-20 of goods manufactured in India and covered under target segments to eligible companies, for a period of five years subsequent to the base year.
The number of applications allowed per applicant shall be restricted to one, Shah clarified. Project Management Agency (PMA) would receive the application through an online portal for prima facie examination and issue acknowledgement within 15 days post completion of examination. All applications would be finalised within 60 days from the date of acknowledgement of receipt of the application, and if found eligible, approval letter will be sent to the applicant. “Due to the pandemic, not many companies are able to take it’s benefits and the PLI scheme should be suitably modified and extended”, concluded Shah.