Textile Ministry relooks at parameters for PLI scheme

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.

As per the Hindu Business Line, 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 Rs 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.

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.

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.