PLI scheme to cover 10 more sectors, to get ₹1.46-lakh crore over five years

Our Bureau New Delhi | Updated on November 11, 2020

Cabinet clears outlay of ₹8-lakh crore for social infra via VGF scheme over 5 years

The Centre today expanded the Production-Linked Incentive (PLI) to 10 more sectors approving a spend of ₹1.46-lakh crore over five years to boost manufacturing. Simultaneously, the government moved to push social infrastructure, giving ₹8-lakh crore to the Viability Gap Funding (VGF) scheme, also over five years.

The PLI scheme incentivises large investments and domestic manufacturing. Currently, it covers three sectors — Mobile Manufacturing and Specified Electronic Components, Critical Key Starting Materials/Drug Intermediaries, and Active Pharmaceutical Ingredients, and Manufacturing of Medical Devices — at an outlay of ₹51,000 crore.


Now, Advance Chemistry Cell (ACC) Battery, Electronic/Technology Products, Automobiles and Auto Components, Pharmaceuticals Drugs, Telecom and Networking Products, Textile Products: MMF segment and technical textiles, Food Products, High Efficiency Solar PV Modules, White Goods (ACs & LED) and Specialty Steel have been added.

“It is going to give the right impetus to the economy. We are looking at: One, Atmanirbartha; two, making sure India is part of the global value chain; three, ensuring that critical sunrise sectors get the necessary support from the government,” Finance Minister Nirmala Sitharaman said while announcing the Cabinet decision.

The PLI scheme will be implemented by the ministries/departments concerned and adhere to the prescribed financial limits.


Fund allotment

The final PLI proposals for individual sectors will be appraised by the Expenditure Finance Committee and approved by the Cabinet. Savings, if any, from one PLI scheme can be utilised to fund another approved sector by the Empowered Group of Secretaries. Any new sector for PLI will require fresh Cabinet approval.

“This PLI is also meant to get more investment in India. Financial support will make production attractive in India,” Sitharaman said, emphasising that the move will clear the perception that Atmanirbartha is an inward-looking policy.

VGF for social infra

The revamping of the Scheme for Financial Support to Public Private Partnerships (PPPs) in Infrastructure Viability Gap Funding (VGF) till 2024-25 is, at present, limited to economic infrastructure, said the Finance Minister. Now, the revamped scheme will also cover social infrastructure such as drinking water, education and health.

There will be two sub schemes — one will cater to social sectors such as waste water treatment, solid waste management, health and education sectors; and the second will support demonstration/pilot social sectors projects.




Published on November 11, 2020

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