PLI scheme to support industry only initially, not create dependency: Goyal

'Ultimately, competition will prevail,' he said, urging industry to be more outward-looking in terms of scaling businesses

Commerce and industry minister Piyush Goyal on Saturday stated that the production-linked incentive (PLI) scheme is not intended to make beneficiaries dependent on government services but to provide initial support to boost the local manufacturing sector.

“Ultimately, competition will prevail,” Goyal said, urging the industry to be more outward-looking in terms of scaling their businesses and not only cater to India's domestic market.

“We are not looking to make you dependent on government subsidies. This is only like a kickstart, like an initial support,” he added.

Goyal, along with top officials from the Department for Promotion of Industry and Internal Trade (DPIIT), met on Saturday to ensure the ‘successful implementation’ of the scheme and discuss setting new targets for achievements under all 14 schemes going forward. As many as 746 PLI beneficiaries and secretaries from the ministries in charge of the 14 PLI schemes were present during the meeting.

 

The minister asked the PLI incentive beneficiary firms to share their “constructive criticism and feedback for better implementation of the scheme”.

“At the same time, we are looking for cooperation. The government has its own restraints and constraints also. We have a Comptroller and Auditor General (CAG) audit like you have your account audits. Ensure that the paperwork is complete so that there are no irregularities. That way, we will have transparency and fairness,” he said while addressing the PLI beneficiaries.

DPIIT Secretary Rajesh Kumar Singh added that there could be some “teething issues” in the scheme regarding documentation or incentive disbursal, but those are “nuts and bolts” of the story on which the government wants industry’s feedback.

On the present value addition, he said it is not enough for a country that is looking to become a developed nation and for huge job creation. Local value addition is happening in sectors such as mobile and white goods.

Singh added that certain quarters have raised some problems with regards to the scheme, and the government is working to address those issues.

The other concern people generally talk about is that in such subsidy schemes, industry uses the incentive and leaves as they invest for a short time to get the subsidy, but “in this case, the scheme design is such” that it is “highly unlikely” that the industry will leave.

However, the minister said that there’s ‘no delay in the scheme’. According to the minister, in the case of certain schemes such as that of white goods, setting up manufacturing has taken a longer time considering the complexities in the sector, in addition to the gestation period that followed.