The Production Linked Incentive (PLI) Scheme for White Goods in India is approved by the Government taking a step forward towards the vision of ‘Atmanirbhar Bharat‘.
Aspirants are advised to go through the details of Production Linked Incentive Scheme – PLI Scheme on the given link.
The topic, ‘White Goods in India’ has been in the news recently, therefore it holds relevance under the Current Affairs section for candidates preparing for the IAS Exam and other competitive exams.
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What are White Goods?
- White goods refer to heavy consumer durables or large home appliances, which were traditionally available only in white.
- The white goods industry consists of air conditioners, refrigerators, washing machines and dryers, dishwashers, and LED Lights.
- The term may also refer to white fabrics, especially linen or cotton articles such as curtains, towels, or sheets that historically used to be made of white cloth.
PLI Scheme for White Goods in India
- The Union Cabinet, chaired by the Prime Minister Narendra Modi, approved the Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights) with a budgetary outlay of Rs. 6,238 crore in April 2021.
- The PLI Scheme will be implemented over a period of 5 years during Financial Year 2022 to 2029, while 2019-20 will be treated as the base year.
- The Department for Promotion of Industry and Internal Trade- DPIIT on June 4th 2021 notified the guidelines for Production Linked Incentive (PLI) Scheme for White Goods such as air conditioners and LED lights manufacturers in India.
- The prime objective of the White Goods PLI scheme is to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. Check out the ranking of India in Global Competitiveness Report on the given link.
- The PLI Scheme for White Goods is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains.
- The Scheme will be implemented as a pan India scheme and is not specific to any location, area or segment of population. Check out the details on Demographics of India on the page link provided here.
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Significance of White Goods PLI Scheme
- The scheme is expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.
- The PLI Scheme for White Goods shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of Air Conditioners and LED Lights.
- Different segments have been earmarked for different types of components separately to specifically target global investments into desired areas. Get details on the World Investment Report on the linked page
- Selection of companies for the Scheme shall be done so as to incentivize manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity. Mere assembly of finished goods shall not be incentivized.
Eligibility under the PLI Scheme of White Goods
- Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the Scheme.
- An entity availing benefits under any other PLI Scheme of government of India will not be eligible under this scheme for the same products but the entity may take benefits under other applicable schemes of Government of India or schemes of State governments.
- Incentives shall be open to companies making brown field or green field Investments.
- The applicant will have to declare an annual plan for domestic value addition, employment generation and exports during the tenure of the scheme. Aspirants can read in detail about the Remission of Duties and Taxes on Exported Products – RODTEP Scheme on the linked page on the given link.
Estimated benefits of White Goods PLI Scheme
- A number of global and domestic companies, including a number of Micro, Small and Medium Enterprises (MSME) are likely to benefit from the Scheme.
- The Scheme is expected to be instrumental in achieving growth rates that are much higher than existing ones for AC and LED industries, develop complete component eco-systems in India and create global champions manufacturing in India.
- It will also lead to investments in innovation and research and development and upgradation of technology.
- It is estimated that over the period of five years, the PLI Scheme will lead to incremental investment of Rs. 7,920 Crore, incremental Production worth Rs. 1,68,000 Crore, exports worth Rs 64,400 Crore, earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.
Candidates preparing for upcoming UPSC Prelims can check the links provided below for assistance in their preparation –
Market of White Goods in India
- Flexible government policies, such as liberalization of license rules, have majorly driven the consumer market for white goods in India. Check out the difference between Globalization and Liberalization on the linked page.
- The India white goods market is segmented based on product and end user. On the basis of product, the market is classified into air conditioners, refrigerators, and washing machines. By end user, it is divided into private sector, domestic, corporate, public sector, government, and hospitals.
- According to India Brand Equity Foundation- IBEF, the white goods industry in India is highly concentrated. The top five players of washing machine and refrigerator segments garner more than 75% of the market share. In addition, 30–35% of the share is procured by the top five players in the kitchen appliances segment.
- Also, increase in digital access, which leads to rise in product awareness, shift in lifestyle patterns, increase in middle-class population, and improvement in standard of living are the ongoing factors leading to growth in consumer spending on electronics and home appliances, thus driving the white goods market growth in the country. Candidates can read about Demographic dividend on the linked page to understand the economic growth potential resulting out of changing population.
- However, the availability of counterfeit brands in the market serves as a challenge for white goods manufacturers.
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