PLI scheme subsidy payouts to eligible companies remain in the slow lane

The pace of subsidy payout to eligible companies under the production-linked incentive (PLI) scheme continues to remain in the slow lane even as the government’s flagship scheme to boost manufacturing entered its fourth year in the financial year 2024-2025 (FY25).

 

The government has disbursed close to Rs 4,000 crore or around a fourth of its annual subsidy payment estimate to the eligible beneficiaries under the 14 PLI schemes, a person aware of the matter said. 

According to the government’s internal estimates and calculations, subsidy or incentive payout under the PLI scheme is expected to be Rs 15,000 crore during FY25. In the first six months of the financial year, incentives were paid to eight out of the 14 PLI sectors, including large scale mobile manufacturing, bulk drugs, white goods, telecom, automobiles, the person cited above told Business Standard. 

 

“About a fourth of the estimated incentive claimed (for the current FY) has already been paid. Majority of the payments will be made by the end of the year when companies submit the bills,” the person cited above said. Incentives claimed by firms are dependent on incremental sales of goods manufactured in India.  

While lesser incentive claims could be an indication of slow progress in the scheme, government officials have maintained that since investment flow has been as per target, lower incentive claims may not necessarily be a cause of concern at the moment.  

A greater clarity on incentive claims and payout will emerge by the end of the year when most of the claims will be made. That apart, challenges related to the time related to process documents have also been sorted to a certain extent, the person added.  

Earlier this year, a high-level government committee raised concerns over the continued delay in the payment of eligible claims to the companies under the scheme, and called for an urgent need to take corrective steps for its smooth implementation. 

Over the last few months, the Department for Promotion of Industry and Internal Trade (DPIIT) pushed nodal agencies responsible for implementing the scheme as well as ministries and government departments to streamline the workflow of disbursement, handhold companies to file correct claims. During the previous financial year, the actual disbursement fell short of the government's estimate of Rs 11,000 crore. By the end of March, Rs 6,800 crore was disbursed. 

The Rs 1.97 lakh crore worth PLI scheme aims to make India a manufacturing powerhouse, improve cost competitiveness of locally produced goods, create employment opportunities, curb cheap imports and boost exports. 

 

The scheme has been launched for 14 sectors, including mobiles, drones, telecom, textile, automobile and white goods pharmaceutical drugs.