The scheme aims to promote domestic manufacturing via financial
incentives on incremental turnover for 5 years.
The Textile Ministry is taking a re-look at the proposed parameters of the
Production Linked Incentive (PLI) scheme for the sector as some in the
industry has complained that the minimum turnover suggested for
qualifying for the scheme is too high and would exclude many, sources have
said.
“Industry players have approached the Textile Ministry and sought a
lowering of the turnover threshold for the scheme as they say that even the
smaller players should be eligible for the benefits.
The Ministry has noted the concern and is deliberating if some changes
could be made in the proposed parameters,” an industry source told
BusinessLine.
The PLI scheme was launched for the textiles sector (man-made fibre
segment and technical textiles) in November 2020 when the Union Cabinet
cleared the proposal for ten sectors which also included pharmaceuticals,
automobiles and auto components, telecom and networking products,
advanced chemistry cell batteries, food products, solar modules, white
goods, and speciality steel.
The textile sector has been allocated ₹10,683 crore under the scheme which,
as per proposed plans of the Ministry, will be offered for incremental
production in 40 identified man-made fibre items and 10 technical textiles
products.
The idea behind the PLI scheme is to promote domestic manufacturing, for
both sales within the country and exports, by providing financial incentives
on incremental turnover for five years.
“While the rates of incentive to be offered to the textiles sector linked to
incremental production are set to be one of the highest amongst the existing
sectors, some in the industry are of the view that it would be of limited
advantage if most units get excluded,” the source said.
Incentive rates
For brownfield companies (companies already in operation) the incentive
rates are proposed to be fixed at 9 per cent of turnover in the first year for
companies with a turnover of ₹100-500 crore (for 50 per cent incremental
turnover) and 7 per cent for those above that. In the subsequent four years
it would keep tapering.
For greenfield projects (new set-ups), a minimum investment of ₹500 crore
has been proposed with incentives at 11 per cent to start with, the source
said.
“But now that there is a demand to make the scheme more inclusive by
lowering the turnover threshold for eligibility, some thought in the Ministry
is going into that,” the source added.
Recently, the Union Cabinet approved the detailed PLI schemes for the
pharmaceuticals sector and IT hardware. To accommodate smaller players
in the pharmaceuticals sector, a sub-category for MSME was created in the
lowest threshold with a small portion of the total funds to be allocated to it.
Source: The Hindu Business Line, India Monday, 01 March 2021