From UPSC perspective, the following things are important :
Prelims level : White Goods, PLI Scheme
Mains level : Success of the PLI Scheme
A total of 52 companies have filed their application with a committed investment of Rs 5,866 crore under the PLI scheme to incentivize the domestic manufacturing of components of White Goods.
What are White Goods?
- White goods refer to heavy consumer durables or large home appliances, which were traditionally available only in white.
- They include appliances such as washing machines, air conditioners, stoves, refrigerators, etc. The white goods industry in India is highly concentrated.
Why PLI scheme for white goods?
- Indian appliance and consumer electronics (ACE) market reached INR 76,400 crore (~$10.93 bn) in 2019.
- Appliances and consumer electronics industry is expected to double to reach INR 1.48 lakh crore (~$21.18 bn) by 2025.
- The PLI Scheme on White Goods is designed to create complete component ecosystem for Air Conditioners and LED Lights Industry in India and make India an integral part of the global supply chains.
- Only manufacturing of components of ACs and LED Lights will be incentivized under the Scheme.
What is PLI Scheme?
- As the name suggests, the scheme provides incentives to companies for enhancing their domestic manufacturing apart from focusing on reducing import bills and improving the cost competitiveness of local goods.
- PLI scheme offers incentives on incremental sales for products manufactured in India.
- The scheme for respective sectors has to be implemented by the concerned ministries and departments.
Criteria laid for the scheme
- Eligibility criteria for businesses under the PLI scheme vary based on the sector approved under the scheme.
- For instance, the eligibility for telecom units is subject to the achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods.
- The minimum investment threshold for MSME is Rs 10 crore and Rs 100 crores for others.
- Under food processing, SMEs and others must hold over 50 per cent of the stock of their subsidiaries, if any.
- On the other hand, for businesses under pharmaceuticals, the project has to be a greenfield project while the net worth of the company should not be less than 30 per cent of the total committed investment.
What are the incentives offered?
- An incentive of 4-6 per cent was offered last year on mobile and electronic components manufacturers such as resistors, transistors, diodes, etc.
- Similarly, 10 percent incentives were offered for six years (FY22-27) of the scheme for the food processing industry.
- For white goods too, the incentive of 4-6 per cent on incremental sales of goods manufactured in India for a period of five years was offered to companies engaged in the manufacturing of air conditioners and LED lights.