PLI Scheme for White Goods
Background & Rationale
When India imports a lot of electronic goods like air conditioners and LED lights, it increases our dependence on foreign countries. To correct this imbalance and promote Atmanirbhar Bharat (self-reliance), the government launched a Production Linked Incentive (PLI) Scheme.
The idea is: if companies manufacture such goods in India and achieve higher sales compared to a base year, the government will give them a direct financial incentive. This motivates companies to invest in domestic production rather than relying on imports.
Quick Facts
- Type: Central Sector Scheme (funded 100% by the Union Government).
- Purpose: Reduce import dependence, promote self-reliance in white goods.
- Implementing Agency: DPIIT (Department for Promotion of Industry and Internal Trade).
- Tenure: FY 2021–22 to FY 2028–29.
Objectives
- Boost domestic manufacturing.
- Attract large investments.
- Remove sectoral disabilities (weaknesses that make Indian industry less competitive).
- Create economies of scale (mass production lowers costs).
- Enhance exports of white goods.
Scope of the Scheme
The scheme allows companies to invest either through:
- Brownfield projects → Expanding/modernising existing units.
- Greenfield projects → Setting up completely new units.
Target Segments:
- Air Conditioners (ACs)
- High-value intermediates.
- Low-value intermediates.
- LED Products
- LED lighting products.
- Components of LED lighting products.
❌ Note: Mere assembly of finished goods will not get incentives. Only genuine value-added manufacturing is rewarded.
Financial Incentive Structure
- Incentive Rate: 4% to 6% on incremental sales (net of taxes).
- Base Year: 2019–20.
- Duration: Incentives are available for 5 years, after one gestation period (time to set up/expand units).
- Fund Limited Scheme: Total outlay capped at the amount approved by the Cabinet.
Monitoring
The scheme is monitored by the Empowered Group of Secretaries (EGoS), chaired by the Cabinet Secretary, ensuring proper oversight and transparency.
In Simple Words
Think of it like this: If a company was selling 1 lakh ACs in 2019–20, and due to new investment, it sells 1.5 lakh ACs in 2022–23, the extra 50,000 ACs are considered incremental sales. On this increase, the government gives 4–6% incentive.
This motivates companies to set up plants in India, generate employment, reduce imports, and even export globally.
✅ UPSC Relevance:
- Appears in Prelims as part of government schemes and “Atmanirbhar Bharat” initiatives.
- Useful in Mains under topics of industrial policy, self-reliance, exports, Make in India, and manufacturing competitiveness.