Govt to undertake a two-stage review to determine PLI scheme progress

The government will undertake a two-stage review of the production-linked incentive (PLI) scheme, where its progress and implementation across various sectors will be discussed.

This will be followed by utilisation of unused funds and the possibility of reallocation to the government department and ministries, which need more amounts, will be assessed, people in know of the matter said. 

An empowered group of secretaries headed by Cabinet Secretary Rajiv Gauba is expected to meet next month to review the progress of the PLI schemes. “Any decision regarding utilisation of savings (from PLI) will also be taken by the empowered group of secretaries,” a senior government official told Business Standard.

Apart from that, Amitabh Kant, chief executive officer (CEO) of government’s policy think tank NITI Aayog, will also hold a meeting on Friday to review the progress and performance of PLI schemes as of now. The total savings for the government under the PLI scheme has been Rs 11,484 crore, which can be utilised or reallocated to any other government department in need of funds. This provision was made while designing the PLI scheme.

Last year, the ministry of new and renewable energy (MNRE) had sought more fund allocations towards its PLI scheme as the original outlay — Rs 4,500 crore — they believed was not enough to reach India’s ambitious renewable energy target. Thereafter, in the Union Budget for 2022-23, an additional of Rs 19,500 crore was made for the PLI scheme for solar manufacturing. 

Similarly, in November last year, the department of pharmaceuticals had also urged the top government panel to provide additional funds of around Rs 3,000 crore under the PLI scheme for pharmaceutical drugs to further boost domestic manufacturing of medicines, in-vitro diagnostics (IVD) and their raw materials in India. The official quoted above said a decision on the demand of the pharmaceutical department will be taken once the funds allocated to them are utilised.

Business Standard had earlier reported that the Ministry of Electronics and Information Technology (MeitY), which is in charge for PLI scheme for large scale electronics manufacturing, IT hardware and IoT devices — wearables and hearables — informed the empowered group of secretaries that it would require over Rs 22,900 crore for the all the schemes that it is running. However, the budget available with the ministry is Rs 2,923 crore. The amount, if allocated, will be utilised to offer more incentives to companies and boost exports.

As of now, 14 PLI schemes have been notified and guidelines have been issued by the respective government departments. The first three schemes were notified in 2020 and were for mobile phones and specified electronic components, APIs and medical devices. “They have seen the maximum progress,” the official said.

According to the economic survey 2021-22, in the case of mobile phones and specified electronic components, in the first round, 16 applications worth Rs 36,440 crore were approved and in the second round, 18 applications worth Rs 483 crore were approved.

“In case of APIs/drug intermediates and medical devices, 42 applications worth Rs 4,347 crore and 13 applications with a committed investment of Rs 798 crore have been approved so far by the competent authority, respectively,” according to the survey.