IT, pharma, electronics departments ask for top-up funds in PLI push

Govt sets up panel to look into demand after strong industry response

Key government departments, such as pharmaceutical, electronics and info­r­mation technology, and new and renewable energy, have sought approval of addit­ional funds for their production-linked incentive (PLI) schemes, following a better-than-exp­ected response from industry and also to give a fur­ther leg up to domestic manufacturing. An empowered group of secretaries headed by Cabinet Secretary Rajiv Gauba is likely to soon consider these demands.

A panel comprising NITI Aayog CEO Amitabh Kant and officials from the Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Finance are currently studying these demands and looking into whether unutilised funds from other PLI schemes could be channelled to these departments, said people in the know.

As of now, total savings for the government under the PLI scheme has been Rs 11,484 crore, they said. The savings can be reallocated to any other department in need of funds — a provision that was ma­de while designing the PLI scheme.

Sharply reducing the outlay for automobile and auto-component PLI added to the savings. In the past, even as the government announced Rs 5,000 crore towards the PLI scheme for IT hardware, an additional Rs 2,350 crore allocation was made.

The total outlay of as much Rs 1.97 trillion was announced for the PLI schemes for 13 key sectors, including automobile, white goods, food processing, and textiles to improve the cost competitiveness of locally produced goods, create employment opportunities, curb cheap imports, and boost exports.

MeitY, which is currently in charge of the PLI scheme for large-scale electronics manufacturing, IT hardware, and IoT devices–wearables and hearables, has informed the panel that it will require over Rs 22,900 crore for all the sche­mes that it is running. However, the Budget available with the ministry is only Rs 2,923 crore.

The department of pharmaceuticals has sought additional funds of around Rs 3,000 crore under the PLI scheme for pharmaceutical drugs to support the domestic production of raw materials required for vaccine production. The financial outlay for the scheme is currently Rs 15,000 crore and aims to boost domestic manufacturing of medicines, in-vitro diagnostics (IVD), and their raw materials in India.

Similarly, last month, the ministry of new and renewable energy sought a fourfold jump in the allocation to Rs 19,500 crore — a request that may soon get approval. The current outlay of Rs 4,500 crore may not be enough to reach the government’s ambitious renewable energy target that has further been ramped up.