Production-linked Incentive Scheme To Be Expanded to AC, Furniture, Leather Sectors as MEIS Wound Up
Subhash Narayan (IANS) 05 August 2020
A new scheme would replace the existing Merchandise Exports India Scheme (MEIS), introduced in April 2015, with the objective to promote manufacturing and exports of specified goods from India. But this scheme did not yield the desired result. Even with its liberal application across sectors, exports remained nearly stagnant; so the government now wants to wind it up by December.
 
The liability under MEIS ballooned from Rs20,000 crore to about Rs45,000 crore in 2019-20, reaching an unsustainable level. However, during the period, the country's exports remained range-bound. In 2014-15, Indian exports were $310 billion and in 2019-20, the export figure was $313 billion. So, the finance ministry has restricted MEIS benefits to just Rs 9,000 crore in FY20-21 and plans to use the savings or the sector-focused production-linked incentive (PLI) scheme, sources said.
 
"The focused and efficient scheme like PLI has been identified as part of 'Aatmanirbhar Bharat' mission that aims to work on import substitution and enhance domestic manufacturing. Five more sectors may be added under PLI soon," said a top government source not willing to be named.
 
The government is looking at expanding the PLI scheme to boost manufacturing of air-conditioners and TV sets where some level of manufacturing exists in the country but a lot of components are still imported. PLI will ensure that the complete ecosystem around the product category develops locally.
 
A similar scheme is also on the anvil for expanding domestic manufacturing of solar equipment that currently is largely imported from China.
 
Similarly, the department for promotion of industry and internal trade (DPIIT) has identified sectors such as tyres, chemicals, furniture, and toys that have the potential to develop local scale to expand the reach of 'Made in India' goods across the globe.
 
PLIs for several sectors would be ready before the end of 2020. The existing PLI for mobile manufacturing offers incentives to the tune of 4%-6% for incremental investment and sales over a period of five years to companies. Similar schemes could be worked for new sectors but the quantum of benefit would depend on capital intensity of an industry.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Comments
yerramr
12 months ago
Many leather industries are wound up due to environmental hazards. Research is needed to reduce such hazard if leather industry has to pick up in its exports.
m.prabhu.shankar
12 months ago
Good Decision
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