IN EARLY 2021, when the government was planning to extend the production-linked incentive (PLI) scheme that it introduced in 2020, India’s air-conditioner (AC) manufacturers met Guruprasad Mohapatra (since deceased), then secretary of the Department for Promotion of Industry and Internal Trade (DPIIT). The delegation, led by Kanwaljeet Jawa, MD & CEO of Daikin Airconditioning India and President of the Refrigerator and Air Conditioner Manufacturers Association, sought a slice of the flagship scheme to make India self-sufficient in AC manufacturing. Soon after, stakeholders like NITI Aayog, Invest India and the commerce ministry were roped in. By early-November 2021, 26 companies—including Blue Star, Havells, Voltas, Johnson Controls-Hitachi, and Daikin—secured approvals on their investment proposals, and things started to move.
This example showcases the government’s desire to engage with industry in finding ways to make a complex, and critical, scheme work. Designed to incentivise manufacturing across 14 sectors, PLI has become a rallying point for the government’s desire to promote local manufacturing and turn India into a global exports hub. The fundamental premise is for manufacturers to pump in money to increase production in their factories (new or old), and then for the government to pay back a share of the value of incremental production over a five-year period. In the process, the government hopes to create 6 million jobs between 2021-22 and 2026-27 (per a written submission in the Rajya Sabha by Rameswar Teli, Union Minister of State for Labour and Employment) and add more muscle to India’s GDP.
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