PLI incentives for FY24 remain at Rs 6,800 crore, far from govt estimates

Department for Promotion of Industry and Internal Trade (DPIIT) secretary Rajesh Kumar Singh tells Shreya Nandi in an interview that PLI schemes on textiles, bulk drugs, food products and solar PV modules are likely to be tweaked. Edited excerpts:

As far as the PLI scheme is concerned, how much disbursement has happened in FY24? Are you worried about the lower-than-expected/targeted disbursement and investments?

Cumulative incentive that has been disbursed as of now is Rs 9,700 crore. For FY24, Rs 6,800 crore has been disbursed to beneficiaries. We are not too worried about the disbursements. The main issue in the scheme is to ensure enhanced investment and sales that has already happened. Investment (cumulative) of about Rs 1.13 trillion has already been reported till February-end.

Production/sales are also about Rs 9.5 trillion, employment is 800,000 and exports Rs 3.45 trillion. These are big achievements. The scheme by design is focused on investment and sales first. Incentives will flow thereafter. But nonetheless, we are working on simplifying and improving the performance of project management agencies (PMAs) so that whenever claims come, they are facilitated.

Is there a concrete plan to facilitate timely disbursement of claims?
We have started review of the standard operating procedures (SOPs) of the PMAs to ensure that the processes are simplified and disbursements are facilitated rather than kept pending. Companies will also have to cooperate. Sometimes, companies’ audit statements are not available, sometimes they don’t respond to queries. There have been wrongful claims in the case of the FAME scheme. So, the PMAs and the government have been cautious. We are also encouraging all government departments to go ahead with quarterly disbursement of incentives (instead of an annual payout).

Can we expect course correction?
In sectors such as textiles, bulk drugs, food products and solar PV modules, the scheme is being tweaked to add some more product lines and increase the tenure of the scheme subsequently. That’s a policy decision that is pending with the Government of India. Drones can see an increase in allocation because the off-take has been good.

The interim Budget saw a mention of new PLI schemes for footwear and toys. When can we expect a rollout?
We don’t have a timeline yet. We are not planning anything immediately. Right now, the focus is not to roll out new PLI schemes before the existing 14 schemes have stabilised and delivered results.

Foreign direct investment (FDI) has been witnessing contraction. How much time will it take to see a reversal in the trend?
It is difficult to predict FDI inflows. It is better to look at it from a three or a five yearly average. A dip (in FDI) is expected in FY24. Going ahead (FY25 onwards), we are now targeting at least total FDI inflows worth $100 billion a year on an average for the next five years. Macroeconomic and political stability, investment in infrastructure, efforts on ease of doing business and liberalisation of FDI — together make India a good investment destination.

The e-commerce policy has been pending since 2018/2019…
It’s pending at the highest level, so we need to wait. A call could be taken after the election.

Open Network for Digital Commerce (ONDC) is supporting kirana shops to go digital. Do you still think we need an e-commerce policy? What’s the roadmap for ONDC?
We think it (e-commerce policy) will bring clarity for everybody because it aligns with the consumer protection Act and will bring clarity for all stakeholders. That’s why we are pursuing it. There has been a series of (FDI) press notes, regulations issued from time to time on e-commerce. The idea is to bring it together, and clarify what the rules are. ONDC has done very well. It has been around only for a couple of years. How it will pick up and to what extent will it become a big player, we will have to wait and see. Our target is to make it a large player in the retail and mobility space.

The startup ecosystem in India has witnessed massive growth. Can we expect any more measure/support from the government for this space?
We provide three-four types of support — recognising them by giving them a certificate of recognition, and providing funding support through three different schemes. We do state-wise rankings and hackathons. All those initiatives will continue.

We are also looking at deep tech startup policy, where more support is required. Business Standard