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On September 30, 2021, the Production-Linked Incentive (PLI) plan for drones and drone parts was announced. On July 6, 2022, a preliminary list of 23 PLI grantees was made public. Twelve drone manufacturers and eleven drone component producers are among the winners. The list of producers of drones and drone parts that have been shortlisted is in the annexe.
The following requirements have been established for producers of drones and drone component parts:
1 Micro, Small, and Medium-Sized Enterprises (MSME) and startups must earn Rs 2 crore in annual sales income for drone manufacturers and Rs 50 lakh for drone component makers in order to be eligible.
2 The eligibility standard for non-MSME has been established at Rs. 4 crore of yearly sales income for drone manufacturers and Rs.
3 A minimum of 40% of net sales is required for value addition.
Over the course of three fiscal years beginning in 2021–22, the government would offer an incentive of Rs 120 crore. The incentive for 2021–2022 will be paid out in 2022–2023 following an examination of the beneficiaries’ financial outcomes.
Gen. (Dr) VK Singh (Retd), Minister of State for Civil Aviation, provided this information in a written response to a Rajya Sabha question.
Govt to Provide Incentive Under PLI Scheme
The Indian government has announced a significant move to boost domestic manufacturing and attract investment by offering incentives under the Production-Linked Incentive (PLI) scheme. This initiative is designed to encourage domestic and international companies to increase production and establish manufacturing units within India.
By providing financial incentives to eligible businesses, the government aims to enhance the country’s manufacturing capabilities, promote exports, and reduce dependency on imports. The PLI scheme is expected to bring transformative changes to various sectors, contributing to India’s goal of becoming a global manufacturing hub.
Overview of the PLI Scheme
Launched in 2020, the Production-Linked Incentive scheme is a government-driven initiative to incentivize companies that invest in specific sectors critical to India’s growth. The scheme targets sectors such as electronics, automobile manufacturing, textiles, pharmaceuticals, and renewable energy, among others. Under this scheme.
the government offers financial rewards to businesses based on their incremental production and sales. In simple terms, companies receive incentives when they achieve certain growth benchmarks in production, thereby encouraging them to expand operations, invest in research and development, and create more jobs.
The PLI scheme is expected to foster innovation, improve product quality, and make Indian industries more competitive in the global market. By offering financial support to businesses, the government hopes to ensure that India becomes an attractive destination for manufacturing, drawing international companies while also supporting the growth of domestic firms.
Incentive Structure
The PLI scheme provides cash incentives in the form of a percentage of the sales made by the eligible company in the specified sectors. The scheme is designed to reward companies for their incremental sales and production over a period of time, ensuring that they make sustained investments in India. The percentage of the incentive varies across sectors, with each sector being allotted a specific allocation of funds based on its strategic importance.
The PLI scheme is expected to have a far-reaching impact on India’s economy, transforming it into a global manufacturing powerhouse. The key benefits include:
- Job Creation: As companies expand production facilities and increase their output, there will be a corresponding rise in employment opportunities. The PLI scheme is expected to create millions of jobs, both directly and indirectly, in various sectors.
- Increased Exports: By boosting domestic production capabilities, the PLI scheme will make Indian products more competitive in international markets, leading to an increase in exports and a positive impact on India’s trade balance.
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