The Union Cabinet today approved the production-linked incentive (PLI) scheme for air conditioners (ACs) and light-emitting diode (LED) lights with an aim to boost the local component supply ecosystem for these items. Under the new PLI, a sum of Rs 6,238 crore has been approved as incentives to selected manufacturers over a five-year period starting 2021-22.
As per the government's initial estimates, the scheme has the potential to attract Rs 7,920 crore of additional investment into the two sectors, creating 400,000 jobs, directly and indirectly. These are expected to translate into Rs 168,000 crore of incremental production of goods, including Rs 64,000 crore worth of exports with 2019-20 as the base year.
Since last April, the cabinet, headed by Prime Minister Narendra Modi, has approved PLI for five sectors. But unlike the previous ones the latest scheme solely focuses on component manufacturing. The manufacturers will receive a four to six per cent incentive on incremental production only if they add value by growing component production.