Many white goods (air conditioners and LED lights) manufacturers want extension of PLI benefits for 1-2 years as some companies were not able to complete capex and achieve the required growth due to Covid. They hope the Finance Minister would make some announcements to this effect in the next budget.
It may be recalled here that the proposal of DPIIT for the PLI Scheme for White Goods for manufacture of components and sub-assemblies of ACs and LED Lights was approved by the Union Cabinet in April last year. The Scheme is to be implemented over a seven year period, from FY2021-22 to FY2028-29 and has an outlay of Rs. 6,238 crore. The Scheme was notified by DPIIT in April last year. The Scheme Guidelines were published in June. Applicants were given flexibility to choose the gestation period either up to March 2022 or up to March 2023.
While the PLI scheme commenced from FY22, some companies have not yet been able to complete the required capex and drive growth due to covid waves in FY22. Hence, there is strong demand for extension of PLI benefits by 1-2 years to help the industry.
Also, domestic manufacturers hope further additional levy on imports of raw materials which may lead to increase in domestic production. However, it’s unlikely that the government may favour further hike in import duties as it may disrupt the production of finished goods in the short term and may raise costs for the companies.