PLI Scheme (Production Linked Incentive Scheme)

The Production Linked Incentive (PLI) scheme is a flagship scheme introduced by the Indian government in Budget 2020-21 to attract investments and boost domestic production of key industries. It offers financial incentives to manufacturers and producers who undertake production of specified goods within India.

Objectives:

• To attract large-scale manufacturing investments and create employment opportunities.
• To boost domestic production of goods and reduce dependence on imports.
• To spur economic growth and accelerate industrialization.

Eligibility Criteria:

• The company should be incorporated in India and have a minimum turnover of Rs. 50 crore in the preceding financial year.
• The company should undertake production of goods under the PLI scheme.
• The company should invest a minimum of 20% of the project cost in plant and machinery.

Incentives:

• Cash Incentive: 20-25% of the eligible capital expenditure.
• Tax Incentives: Exemption from corporate tax for 5 years.
• Interest Subsidy: 2-4% on loans taken for setting up the plant.
• Additional Incentives: Duty drawback, free trade agreements, and access to export subsidies.

Key Industries:

The PLI scheme covers a wide range of industries, including:

• Automobiles
• Electronics
• Pharmaceuticals
• Renewable Energy
• Critical Components

Implementation:

The PLI scheme is implemented through a web-based platform called “PLI Scheme Portal.” Companies interested in applying for incentives can submit their applications online. The government has set up a dedicated task force to process applications and provide support to eligible companies.

Benefits:

• Reduced cost of production.
• Increased profitability.
• Access to global markets.
• Creation of new jobs.

Overall, the PLI scheme is a significant initiative by the Indian government to boost domestic production and attract investment. It has the potential to usher in a new era of industrial growth and employment creation.