NEW DELHI: The government has approved a production-linked incentive (PLI) scheme for white goods such as Air Conditioners and LED Lights.

The Department for Promotion of Industry and Internal Trade (DPIIT) has notified the PLI scheme for white goods viz air conditioners and LED lights, with a budgetary outlay of Rs 6,238 crore.

The proposal has already been approved in a Union Cabinet meeting, chaired by Prime Minister Narendra Modi. With this, the new scheme has become operational and all eligible manufacturers can now take the benefit of financial incentives provided under it to boost capacity.

The PLI scheme for White Goods (PLIWG) proposes a financial incentive to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain. Its prime objectives include removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation.

As per the notification, the PLI scheme for white goods will extend an incentive of 4-6 percent on incremental sales of goods manufactured in India for a period of five years to companies engaged in the manufacturing of air conditioners and LED lights. The period of five years will be calculated subsequent to the base year and one year of gestation period.

The applicant will have to fulfill both criteria of cumulative incremental investment in plant and machinery as well as incremental sales over the base year in that respective year to be eligible for PLI. The first year of investment will be FY 2021-22 and the first year of incremental sale will be FY 2022-23. Actual disbursement of PLI for a respective year will be subsequent to that year.

One entity may apply for one target segment only. However, separate Group companies may apply for different target segments. Further, sales by entities to their group companies should be at an arm's length price as those to outside group companies.

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