Production Linked Incentive Scheme for White Goods (ACs and LED Lights) Undergoes Key Revisions

In response to an array of feedback and suggestions received from the beneficiaries of the Production Linked Incentive (PLI) Scheme for White Goods and various industry associations, significant modifications have been introduced in the scheme’s guidelines. These changes are geared towards simplifying the operational aspects of the scheme and enhancing the ease of conducting business within the sector.

The following alterations have been implemented in the PLI Scheme for White Goods (covering Air Conditioners and LED Lights):

1. Adoption of Cost-Plus Method: The scheme now adopts the Cost-Plus method in place of the Comparable Uncontrolled Price (CUP) method for calculating sales prices, particularly for captive consumption or supplies to group companies. This adjustment also necessitated an amendment to the definition of ‘Arm’s length.’
2. Eligible Investments: Investments in tool rooms for manufacturing Moulds and Dies, among other elements, are now recognized as eligible investments under Capital Investment.
3. Extended Timeframe: Beneficiaries are now provided an additional year, beyond the initial two-year period, to report the establishment of additional manufacturing facilities.
4. Revised Submission Deadline: The last date for the submission of claims and refunds for excess incentives due to discrepancies between statutory compliance and records provided at the time of filing claims has been revised.
5. Administrative Ministry Site Visits: Administrative ministries now have the authority to conduct site visits.
6. Bank Guarantee Roll Over: Provisions have been made for the roll-over of bank guarantees.
7. Annexure Adjustments: Appropriate changes have been introduced in the annexures to the Scheme Guidelines.

In alignment with the Prime Minister’s vision of “Atmanirbhar Bharat” (Self-Reliant India) and the commitment to place manufacturing at the forefront, emphasizing its role in driving India’s growth and generating employment opportunities, the PLI Scheme for White Goods was given the green light by the Union Cabinet under the Prime Minister’s leadership on April 7, 2021. This scheme aims to promote the production of components and sub-assemblies for Air Conditioners (ACs) and LED Lights, with a seven-year implementation period spanning from FY 2021-22 to FY 2028-29, and a budget allocation of ₹6,238 crore. The scheme was officially notified by the Department for Promotion of Industry and Internal Trade (DPIIT) on April 16, 2021, with the scheme guidelines made public on June 4, 2021. To ensure the smooth execution of the scheme, two corrigenda to the scheme guidelines were issued on August 16, 2021, and February 24, 2022, following extensive stakeholder consultations.

As of now, the PLI Scheme for White Goods is fully operational. Of the 64 selected beneficiaries, 15, who opted for a gestation period up to March 31, 2022, have commenced commercial production. The remaining beneficiaries, who have chosen a gestation period up to March 31, 2023, are in various stages of implementation.

The PLI Scheme for White Goods is strategically designed to cultivate a comprehensive component ecosystem for the Air Conditioners and LED Lights industry in India, positioning the nation as an integral part of the global supply chains. It is anticipated that domestic value addition will escalate from the current 15-20% to a remarkable 75-80%.