In early April, Union Cabinet approved Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights). Incentives worth Rs. 6,238 Crore to be provided over five years for manufacturing of these products in India Production Worth Rs. 1.68 Lakh Crore and Exports Worth Rs. 64,400 Crore Estimated in Five Years. Will help facilitate additional investments of Rs. 7,920 Crore, Generate Direct and indirect Revenues of – Rs. 49,300 Crore and create four Lakh Jobs in Five Years.
DQ Channels talked to the partner and the SMB community about it. They seem to have varied thoughts about it. L Ashok, Proprietor of Futurenet Technologies said, “The PLI scheme is excellent to boost Make in India. This could also help increase investment and employment in the country. A tangible initiative that would be boost and to motivate domestic manufacture. But the big question is, Will this alone be enough to boost the manufacturing? In the recent past, we have seen a lot of statutory processes being simplified. But even that is not enough. There is still a long way to go. The very concept of ease of doing business has to increase to make such programmes more effective.”
“A PLI scheme should offer more than just cash incentives like tax benefits. It should also be easy to approach to gain the benefits provided under the scheme. These schemes should be extended to the service industry to boost employment and productivity.”
— L Ashok, Futurenet Technologies
Commenting on this scheme, Rajesh Thiyagarajan of VB Systems said, “Major players like Samsung, Song, Dell have established assembly plants in India, whereas manufacturing or production happens in Taiwan and China. The reason behind this is that in those countries there is infrastructure and the manufacturing cost is low. An assembly unit India is to claim the tax exemption, and we cannot establish assembling in India as Make In India. The PLI scheme would not help in reflecting productions in India right now for the global brands. They would opt to build an infrastructure here only if global exporting opportunities can be possible.”
“Such a scheme for an Indian company would not hold good as they lack in the customer attraction these established global brands have.”
-– Rajesh Thiyagarajan, VB Systems
Pradeep Menon of Zacco Cybersecurity says, “The PLI scheme has rightfully targeted the focus to become a self-reliant nation. The outcomes in various sectors so far have been highly encouraging. I extremely encourage this to be extended to new sectors as well. By incentivising large organisation to set up their plants in India or by having Indian companies set up establishments, it generates enormous employment opportunities, creates a local supplier ecosystem, improves country’s integration to global supply chain in these sectors, brings in foreign capital flows and give a huge impetus to growth in these sectors which were hitherto not focused. The PLI scheme also needs to take into consideration that appropriate environmental protection measures are strictly adhered to and does not deplete the country of already lowering water table levels.”
“The current incentive scheme currently apportions the allocated funds of under-performing companies to over performing companies; however, this needs to be looked into being fairly distributed. Increase in employment, leap frog in skills in technology and know how, enhanced integration with global supply chains, import of best practices followed by these large companies, these are few of expectations from the PLI scheme.”
— Pradeep Menon, Zacco Cyber Security
“For the newer products we feel it’s better to start with SKD and then move to CKD, the government has to give enough time to the industry, with various tax benefits in the SKD & CKD manufacturing. This time can be utilised by the industry to build up the supply chain ecosystem, which is essential to take full use of PLI schemes.”
–Rajesh Doshi, Co-founder & Director, Zebronics India
Rajesh Doshi of Zebronics India says, “PLI or production linked schemes are great initiatives by the Government of India. PLI schemes are essential in bringing production in our country and strengthen the Self-Reliant India plan. Although the PLI scheme works well for products, whose supply chain is mature and present in the country. We are working towards bringing manufacturing to the country. We are very hopeful that government will provide benefits to smaller manufacturers too, who are associated with this industry to help develop a healthy ecosystem and a strong supply chain.”
Seeing the comments of the partners and SMBs, it appears that the government needs to take their viewpoints and make manufacturing in India more easier than what it is now. It has to become cheaper than that in China to become viable for the world. Further, there should be a clear plan of where the financial help is going and whether the manufacturers are able to sell and export their products. Although exports are under NIL GST, it doesn’t make sense to have the entire GST regime mandatory if at the end of it they have to file NIL GST. Exports should be out of the GST regime, so that the exporters can just send their products abroad with minimum hassles.
–Dr Archana Verma