‘PLI scheme eligibility targets tough but achievable’

When we discussed the initial proposal at length with industry, we found that this scheme needed modifications. Changes were needed both in terms of product lines as well as in terms of minimum investment and minimum turnover requirements. If the industry said the given parameters were not achievable, it needed to be considered as we would not like to have a scheme which would become a non-starter. We now have a scheme where targets are tough, but still achievable.

Initially, we had only 40 MMF apparel lines. The weakest link in India is fabrics, especially MMF fabrics. So now 14 HS lines of fabrics, which are top traded lines in the world, have been included. We now expect that some of the people who are into spinning will perhaps graduate to fabrics. Intermediate products of fabrics have been taken care of.

There is no separate threshold for technical textiles, MMF garments and fabrics. It is all put together. If someone wants to do apparel, garments and technical textiles, one can do all. We have two parts of scheme. First part of scheme requires minimum investment of ₹300 crore. Part two requires minimum investment of ₹100 crore. Since it is PLI, it is not just investment. We will allow investors two years to make the investment. This should result in minimum turnover of ₹600 crore (for ₹300 crore investment) or ₹200 crore (for ₹100 crore investment) as the case may be, for company to become eligible for incentive. Both conditions for investment and turnover have to be satisfied.

Incentive for part 1 would start from 15 per cent of minimum turnover achieved. Thereafter, every year, they have to achieve 25 per cent growth, over and above minimum of ₹600 crore. From second year onwards, incentive will be paid on the incremental turnover. This will go down by 1 per cent every year for the next four years.

Similary, in case of ₹ 100 crore invesment, first year incentive will be 11 per cent of minimum turnover. There, incentive is less because investment is less. Subsequent four years, the incentives will go down by 1 per cent. These levels were lowered after discussion with industry as some initial proposals for incremental turnover were as high as 40 per cent.

We will notify the scheme in a few days’ time. We have already framed the draft guidelines. The draft was also part of the Cabinet submission. The draft guidelines will be finalised in consultation with other Ministries and Departments like DPIIT, Commerce, Finance and NITI Aayog. We will share this copy of draft guidelines with them immediately and after getting their inputs we will come out with the guidelines, along with an FAQ.

They will include details such as definitions of subsidiary, turnover, etc. They will also specify what kind of investment would be eligible and the documents to be submitted along with applications. Other necessary information like what kind of audit will be required to get the incentive will also be provided. We plan to have a window to invite applications from November 1 to December 31.

Since this is a scheme with limited funds of ₹10,683 crore, if there are more takers, we will have to select companies based on certain pre-determined criteria, which will be part of guidelines. Preference may be given on the basis of location. We will give preference to industry located in backward area or tribal or smaller cities. We will also give weightage to industry that generates more employment per unit of investment made. Financial and technical capacities will also be taken into account.

COMMENT NOW