New Delhi: Union cabinet Wednesday cleared the production-linked incentives (PLI) of Rs 10,738 crore for two more sectors – manufacturing of high efficiency photovoltaic solar panels and air conditioners, AC components and LED lights, said union minister Piyush Goyal.
While the Cabinet allocated Rs 4,500 crore for boosting the production of high efficiency solar panels in the country, an amount of Rs 6,238 crores has been allocated for promoting the manufacturing of air conditioners, AC components and LEDs.
The money will be disbursed to the eligible companies over the next five years for actual increase in the production of these goods.
In order to promote domestic manufacturing in 13 sectors of the economy, where the country has competitive or comparative advantage over other countries, the government last year announced a production linked incentive scheme to give a fillip to production of these goods in the country.
The government has so far announced a production-linked incentive scheme for 9 of the total 13 identified sectors.
PLI for solar panel manufacturing
Goyal said a subsidy of Rs 4,500 crore will be disbursed over the next five years to promote production of high quality photovoltaic solar panels in the country and the subsidy will be linked to two factors, increase in the production of panels which will also be linked to their efficiency level.
“An additional 10,000 megawatt (solar panel) production capacity will be created in the country,” said the minister, adding that it will lead to creation of 30,000 direct jobs and 1.1 lakh indirect jobs in the country.
Goyal said it will attract foreign direct investment of around Rs 17,200 crore in Solar PV manufacturing sector.
PLI for AC, AC parts, LEDs
Talking about India’s dependence on imported air conditioners, the minister said the country imports 70-80% of its requirement from abroad in a sector which is growing at a fast rate of 15-20% a year due to the rising income levels.
Goyal said now the ACs and AC components being brought under the PLI scheme, the value addition in air conditioners assembled in India will go up to 75% from 25% at present.
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Similarly, in case of LED, though the country produces 80-85% of its domestic LED requirement but some critical components are still imported and value addition in the LED industry is just 40-50%, said the minister.
Goyal said the government has approved a Rs 6,238 crore subsidy under the production linked scheme for air conditioner manufacturers and LED industry.
Goyal said the subsidy scheme will encourage the production of ACs, AC components, LEDs and solar panels worth Rs 1.68 lakh crore with an export of goods worth Rs 64,000 crore.
“India can become an important manufacturing hub and emerge as a key part of the global supply chain, this is the intent of the government,” he told reporters.
$500 billion production target under PLI
In order to increase the share of manufacturing in the country’s GDP to 25%, the Centre last year announced a subsidy scheme of nearly Rs 2 lakh crore for five years for encouraging domestic production in the country.
The government estimates that the PLI scheme will be able to increase the production of additional goods and components worth Rs 35 lakh crore over the next five years and result in creation of 1 crore new jobs.
The Union Cabinet meeting chaired by Prime Minister Narendra Modi also cleared the signing of a memorandum of understanding (MoU) between ISRO’s National Atmospheric Research Lab and its Japanese counterpart.
