Union Minister for Road Transport and Highways Nitin Gadkari spoke with CNBC-TV18 on the government's production-linked incentive (PLI) scheme, the progress it was making and the bottleneck the government was facing in implementing the initiative.
Nitin Gadkari was speaking on the response so far from across all the sectors for which the scheme had been implemented and whether it had started off according to the government's expectations. He observed that the scheme had the potential to significantly enhance the scale of manufacturing in India.
"Our track record in meeting the targets is excellent. Under the leadership of our prime minister, we are marching towards this target. There are lots of difficulties but there are some people who turn problems into opportunities. The mission of our government is to accept the challenge, improve the situation and march towards achieving the target," said Gadkari.
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Stressing on India's manufacturing capabilities, Gadkari stated the scheme would pick up well across sectors, and dismissing any apprehensions cited the example of solar power. He stated that, when solar power had been introduced for the first time in India, there were difficulties too but the sector eventually grew over a period of time.
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"We are working on many alternatives because our demand is huge. Investors will come. Once upon a time, our solar power percentage was very less, now 38 percent is from solar power. We will grow up to 60 percent in the next two-three years. At the same time now," said Gadkari on the challenges ahead and when the scheme may start to show results.
What is the PLI scheme?
- The PLI scheme was launched to boost manufacturing, generate employment, increase exports and cut imports
- The scheme initially targeted three industries- mobile and allied component manufacturing, electrical component manufacturing, and medical devices.
- So far, the government has announced PLI schemes for 14 sectors including automobile and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and advanced chemistry cell batteries.
- The government has set aside Rs 1.97 lakh crore under the PLI schemes for various sectors
- The government expects the scheme to generate additional output worth Rs 28.15 lakh crore and 6.45 million new jobs over the next five years.
- The government estimated that incentives would spur fresh investments to the tune of Rs 42,500 crore over five years.
- A total outlay of Rs 25,938 crore over a period of five years on the scheme for Automobiles and Auto Component Industries. The PLI scheme in batteries is seen as a phenomenal step to look at future technologies in India
- The scheme offers sops to companies based on the sales value of the components
- Companies selected for incentives under the scheme would stand to get 8-11 percent of the Determined sales value
- To qualify for the investments, the company should invest a minimum of Rs 250 Crore over five years, with at least Rs 100 crore in the initial two years.
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