• The Cabinet approved a Rs 19,500-crore Production Linked Incentive (PLI) scheme on ‘National Programme on High Efficiency Solar PV Modules’ with an aim to attract Rs 94,000 crore investment in the sector.

• In August 2021, the Union Cabinet approved the first tranche of Rs 4,500 crore of the PLI scheme.

• It is the second tranche of the PLI scheme and the government is hoping that about 65 GW per annum manufacturing capacity of fully and partially integrated, solar PV modules would be installed in the country.

• The national programme aims to build an ecosystem for manufacturing of high efficiency solar PV modules in India and reduce import dependence in the area of renewable energy.

• Solar PV manufacturers will be selected through a transparent selection process. It will be disbursed for five years after commissioning of solar PV manufacturing plants and sales of high efficiency solar PV modules from the domestic market will be incentivised.

Expected outcomes:

• It is estimated that about 65 GW per annum manufacturing capacity of fully and partially integrated solar PV modules would be installed.

• About 2 lakh direct jobs would be created in the sector.

• Creation of manufacturing capacity for balance of materials like EVA, solar glass, backsheet, etc.

• Direct employment of about 195,000 and indirect employment of around 780,000 persons.

• Expected to reduce import substitution of about Rs 1.37 lakh crore.

• Impetus to research and development to achieve higher efficiencies in Solar PV Modules.

PLI schemes

An outlay of Rs 1.97 lakh crore has been announced in Union Budget 2021-22 for Production Linked Incentive (PLI) schemes for 13 key sectors for a period of five years starting from FY 2021-22.

These sectors are:

1) Mobile manufacturing and specified electronic components (Large scale electronics manufacturing)

2) Critical key starting materials/drug intermediaries & active pharmaceutical ingredients

3) Manufacturing of medical devices 

4) Automobiles and auto components

5) Pharmaceuticals

6) Specialty steel

7) Telecom and networking products

8) Electronic/technology products

9) White goods (ACs and LEDs)

10) Food products

11) Textile products: man-made fibre (MMF) segment and technical textiles

12) High efficiency solar PV modules

13) Advanced Chemistry Cell (ACC) battery.

• In September 2021, the Union government approved a PLI scheme for drones and drone components with an allocation of Rs 120 crore spread over three financial years.

• The objectives of PLI schemes are to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

• It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. 

• The schemes are expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

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