The Union Cabinet approved a production linked incentive (PLI) scheme for white goods — air conditioners and LED lights — with a budgetary outlay of Rs 6,238 crore.

Highlights of the scheme:

• The PLI scheme for white goods will be implemented across India and is not specific to any location, area or segment of population. A number of foreign and domestic companies, including MSMEs, are likely to benefit from the scheme.

• The scheme shall extend an incentive of 4 per cent to 6 per cent on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of air conditioners and LED lights. 

• Different segments have been earmarked for different types of components separately to specifically target global investments into desired areas. Selection of companies for the scheme will be done to incentivise manufacturing of components or sub-assemblies, which are not manufactured in India presently with sufficient capacity.

• Mere assembly of finished goods will not be incentivised.

• Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the scheme. Incentives shall be open to companies making brownfield or greenfield investments. 

• Thresholds of cumulative incremental investment and sales of manufactured goods over the base year would have to be met for claiming incentives.

• The scheme is expected to be instrumental in achieving growth rates that are much higher than the existing ones for AC and LED industries, develop complete component eco-systems in India and create global champions manufacturing in India.

• They will have to meet the compulsory Bureau of Indian Standards (BIS) and Bureau of Energy Efficiency (BEE) quality standards for sales in the domestic market and applicable standards for global markets.

• It is estimated that over five years, the scheme will lead to an incremental investment of Rs 7,920 crore, incremental production worth Rs 1,68,000 crore, exports worth Rs 64,400 crore, earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.

• The scheme is expected to help in increasing value addition from 25 per cent to 75 per cent in the AC segment and 40-45 per cent in LED lights.

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