Mumbai, November 11: Just ahead of Diwali 2020 and amid the coronavirus outbreak, Narendra Modi government announced Diwali bonanza for different sectors in India. The Union Cabinet on Wednesday gave in-principle clearance to Production Linked Incentives (PLI) scheme for ten sectors including white goods, auto, auto components and battery manufacturing wherein sops worth Rs 1.47 lakh crore would be given over the next five years.
According to reports, among sectors, auto components and automobile sectors have received the maximum incentive of Rs 57,000 crore.
The scheme is aimed to give an impetus to India's manufacturing, by providing subsidies and incentives to sectors which excel in their performance.
What is PLI?
The PLI is part of the government’s plan to make India an attractive manufacturing destination and self-reliant besides helping it emerge as a strong alternative to China. It aims to do this through reduced corporate tax rate of 25 percent, PLI benefits and phased manufacturing plan (PMP).
"The PLI scheme will make Indian manufacturers globally competitive, attract investment and enhance exports," Union Minister Prakash Javadekar said, following the Cabinet's decision.
PLI will not only make India self-reliant but will also create more jobs in the country
How will it work?
The Centre will give incentives on additional production and will allow companies to export products made in India. The PLI scheme now offers 4-6 percent incentive to eligible electronic companies on incremental sales (over the base year of 2019-20) of manufactured goods--mobile phones and electronic components such as printed circuit boards, sensors, among others--for a period of five years.
There is no cap on the number of companies that will be eligible for PLI under each category, for now, said FM Sitharaman.
The decision of the Union Cabinet was announced by information and broadcasting minister Prakash Javadekar along with finance minister Nirmala Sitharaman in New Delhi on Wednesday. PLI will thus aid economic recovery while remaining committed to an open and global economy.