Mahindra Group Chairman Anand Mahindra has dubbed the production-linked incentive (PLI) scheme as a game-changer decision. According to him, with the announcement of the PLI scheme, the government’s attitude towards the industry has dramatically shifted.
On 11th November 2020, the Union Cabinet approved the PLI scheme for 10 industrial sectors. Under this scheme, these 10 sectors will receive Rs 1,45,980 crore incentive for over next 5 years. The aim of this scheme is to boost the local manufacturing, job creation and reduction of reliance on foreign country-backed supply chains across these industrial sectors.
The industries that are covered include automobiles and auto components, advanced chemistry cell battery, electronic and technology products, telecom and networking products, pharmaceuticals drugs, food products, textile, MMF segment and technical textile, speciality steel, high efficiency solar PV modules, white goods.
Under the PLI scheme, an outlay of Rs 51,311 crore has already been approved. The auto and auto component industry combined has been allocated an amount of Rs 57,042 crore, which will be disbursed through the Department of Heavy Industries.
Talking about the scheme, Anand Mahindra tweeted, “I took some time to explore the contours of this initiative. I don’t use the term ‘game-changer’ too often but it’s apt in this case. For me, what’s much more important than the mechanics of the scheme is the dramatic shift it signals in the attitude towards industry.”
Anand Mahindra also said that he started his career during the ‘License Raj’ where scale and growth were frowned upon. “Finally, this policy signals recognition that a) scale is imperative in order to nurture globally competitive businesses b) large enterprises foster a large ecosystem of small/micro enterprises,” Mahindra Chairman further tweeted.
According to Anand Mahindra, it makes eminent sense to initially catalyse the growth of selected sectors with world-beating potential. “I believe the chosen industries will rise to the challenge if the policy is applied consistently & transparently,” he further added.
The governing bodies of Indian auto and auto component industry – Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA); have already said that the PLI scheme will help the auto and component industry not only to become globally competitive but self-reliant also in the line of the government of India’s Atmanirbhar Bharat campaign.
SIAM expects that the PLI scheme will increase competitiveness and take the growth of the auto sector to the next level. On the other hand, ACMA said that the PLI scheme will also encourage the industry to become a net exporter and reduce its dependence on imports.