As a part of mission Atmanirbhar Bharat, the Union Cabinet yesterday approved the PLI scheme for white goods and high efficiency solar photovoltaic (PV) modules with an outlay of 10,738 Crore. The white goods segment which consists of air conditioners and LED lights, was given Rs. 6,238 Crore and the solar PV modules segment was given Rs. 4,500 Crore. The promised incentives will be provided for the manufacturing of these products in the country over the next five years.
“The prime objective of the PLI scheme is to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. The scheme is expected to attract global investments, generate large scale employment opportunities and enhance exports substantially,” said the government in a press release.
Provisions for White Goods
The government expects total products worth Rs. 1.68 Lakh Crore with exports of Rs. 64,400 Crore in the white goods segment. The scheme will help to facilitate additional investments of Rs. 7,920 Crore and generate direct Rs. 49,300 Crore revenues in addition to generating four Lakh new job opportunities in five years.
The government will provide incentives of 4-6% over the next five years on incremental sales for white goods manufactured in India. Through the scheme, the government aims to provide incentives to companies manufacturing the components or sub-assemblies that are not manufactured currently in India, instead of the companies involved in the mere assembly of imported finished goods. The scheme will catalyse the growth in the AC and LED segments and facilitate the creation of a complete ecosystem, which in turn will provide a lot of opportunities for MSMEs in the sector.
Provisions for Solar PV Modules
With an outlay of Rs. 4,500 Crore for the solar PV modules, the government expects to add 10,000 MW capacity of integrated solar PV manufacturing plants in the next five years. The scheme will help to bring direct investments of around Rs. 17,200 Crore into the sector and generate 30,000 direct and 1,20,000 indirect employment opportunities.
At present India’s solar capacity addition is primarily dependent on solar panels imported from other countries. The PLI scheme for solar PV modules will help to minimize India’s solar panels dependence on imports in strategic sectors like power and electricity. Under the scheme, incentives will be provided to companies for the sale of solar PV modules and also for sourcing their materials from other suppliers in the domestic market. Hence, the scheme will increase the local value addition and boost the small and medium scale enterprises in the solar industry.
Impact on MSMEs
The PLI scheme not only benefits large scale enterprises but also helps small and medium scale enterprises. Though the scheme is not directly intended at the MSMEs, its impact is certain and huge on the micro, small and medium scale industries. The PLI scheme by attracting investments into the manufacturing sector from large scale industries creates an ecosystem for the MSMEs. These MSMEs will act as anchor units and supplier base for the large enterprises across the value chain. It also provides a new direction for MSMEs with a focus on exports to harness opportunities in the global markets.
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