Categories: Business

government to expand production linked incentive scheme to more sector says source

Photo: PTI

government to expand production linked incentive scheme to more sector says source

New Delhi In order to give a boost to the manufacturing sector of the country, the government is considering giving incentives related to production to air conditioners and some more sectors like TV sets, leather, chemicals, furniture, tires and toys.

Sources in the government said that manufacturing sectors are being identified by the finance ministry as well as commerce and some other ministries for finalization and will be announced in the next few weeks. This production-linked incentive for new areas will be the same as the Production Linked Incentive (PLI) scheme from the Ministry of Electronics to develop a mobile manufacturing ecosystem. Similarly, the Department of Chemicals and Petrochemicals has brought a Rs 7,000 crore scheme for the pharmaceutical sector to create drug and active pharmaceutical ingredients ie APIs on a large scale.

The new scheme will replace the existing Merchandise Exports India scheme, or MEIS, which was launched in April 2015 to manufacture and export certain items. But this scheme did not yield the desired results. Despite this liberal outlook, exports remained stable, so the government now wants to close it by December. Liability under MEIS increased from Rs 20,000 crore to Rs 45,000 crore during 2019-20, while exports remained limited. India's exports stood at $ 310 billion in 2014-15 and in 2019-20 also the exports stood at $ 313 billion. Thus there was no significant increase in exports. Hence the Ministry of Finance has limited the profit of MEIS to Rs 9,000 crore in FY 2021.

This post was published on August 5, 2020 6:00 pm

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