PLI Scheme Support Initial, Industry Must Face Competition: Piyush Goyal

In a significant address to industry stakeholders, Union Minister of Commerce and Industry, Piyush Goyal, emphasized the need for the industry to view the Production-Linked Incentive (PLI) scheme as an initial support rather than a long-term dependency. The minister urged PLI beneficiary firms to provide constructive criticism and feedback for better implementation of the scheme.

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Kickstart, Not Crutches: PLI Scheme's Purpose

Goyal stressed that the PLI scheme is intended to provide a boost to the industry, not to make it reliant on government subsidies. He encouraged companies to view the incentives as a kickstart and an initial support, recognizing that competition will ultimately prevail.

Beyond Domestic Comfort: Embracing Global Markets

The minister also emphasized the importance of the industry gradually focusing on global markets and moving beyond the comfort of India's large domestic market. He highlighted that a more outward-looking approach would enhance scale, volume, and cost-effectiveness, leading to greater competitiveness.

Value Addition and Scheme Concerns

Addressing the gathering, 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) stands at approximately 17.4%. He acknowledged concerns raised about the scheme and assured that the government is working to address these issues.

Addressing Doubts and Scheme Design

Singh clarified that local value addition is occurring in sectors such as mobile and white goods. He also addressed concerns that industries might use the incentives and leave after a short period, emphasizing that the scheme design minimizes this possibility. He reiterated the government's trust in the private sector and highlighted that the scheme was developed in consultation with the industry.

Setting Higher Standards and Effective Implementation

The meeting brought together officials from various ministries and departments, project management agencies, and industry players from 14 PLI schemes. The discussions aimed to set higher standards of achievement for the PLI scheme and facilitate its effective implementation going forward.

PLI Schemes: Overview and Objectives

In 2021, the government announced PLI schemes for 14 sectors, including telecommunications, white goods, textiles, medical devices, automobiles, speciality steel, food products, solar PV modules, advanced chemistry cell batteries, drones, and pharmaceuticals, with an outlay of Rs 1.97 lakh crore. These schemes aim to attract investments, ensure efficiency, bring economies of scale, and enhance the global competitiveness of Indian companies.

Progress and Disbursements

The deliberations gained significance as the government had disbursed only Rs 4,415 crore under the schemes for eight sectors, including electronics and pharma, till October this fiscal. The target for disbursal by the end of the fiscal year is Rs 11,000 crore.

Industry Feedback and Scheme Success

Addressing the media later in the day, Minister Goyal confirmed that all 746 applicants of the PLI schemes participated in the deliberations. He acknowledged that there may be minor issues, but overall, the scheme is successful and there are no delays. He highlighted that some sectors have taken off quickly, while others require a longer gestation period due to the complexity of the technology involved.

The meeting between industry stakeholders and government officials provided a platform for constructive dialogue, feedback, and the exchange of ideas. The PLI scheme serves as a catalyst for India's manufacturing sector, encouraging companies to embrace global markets, enhance value addition, and contribute to the country's economic growth and competitiveness.