PLI schemes in the works for toys, footwear & leather

Extending the scheme for train parts under consideration but proposal at early stages of discussion [View in browser]( [See all newsletters]( 18 August 2023 PLI schemes in the works for toys, footwear & leather [The PLI scheme for toys would have an outlay of ₹3,500 crore while footwear and leather would be apportioned about ₹2,600 crore.] Keeping with the objective of fuller utilisation of the ₹1.97-lakh crore allocation for the production linked incentive (PLI) scheme, the government is preparing to announce its extension to the toys and the footwear & leather sectors and Cabinet notes for both are at an advanced stage of finalisation, official sources have said. Extending the PLI scheme for manufacturing of train parts is also being considered by the Centre but the proposal is still at the discussion stage, a source tracking the developments told businessline. “It was initially planned by the Department for Promotion of Industry & Internal Trade that the PLI scheme for toys would have an outlay of ₹3,500 crore while footwear and leather would be apportioned about ₹2,600 crore. But many changes are made during the inter-Ministerial consultations and the final decision on the outlay will be taken only by the Cabinet,” the source said. Production boost The Centre announced the PLI scheme in 2020 to attract investments in 14 sunrise and strategic sectors that could boost manufacturing and exports. The sectors include automobile and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and ACC batteries. However, due to under-subscription of the scheme in several sectors, the government is likely to have substantial savings from the ₹1.97-lakh crore allocation, top officials had earlier indicated. The savings could be used to cover more sectors and also re-structure some of the existing schemes that need tweaking, the officials said. The PLI scheme offers incentives based on incremental sales to be distributed over five years. Incentives disbursed in FY 2022-23 were about ₹2,900 crore, while in the current fiscal it is expected to go up to ₹13,000 crore. Some sectors, such as large-scale electronics, pharmaceuticals and food processing have performed well but some other like high-efficiency solar PV modules, ACC batteries, textile products and speciality steel are lagging. “While disbursals will pick up over the next two years, it is clear that savings would be substantial. But the government needs to be careful while picking new sectors,” the source said. Toys and footwear & leather are amongst the top choices for the government as not only are these labour-intensive but steps have already been taken to make the sectors attractive for investments. Quality control A Quality Control Order (QCO) for toys was issued in 2020 bringing the sector under compulsory certification from Bureau of Indian Standards the following year in order to restrict import of sub-standard toys and to promote domestic toy industry. Per government estimates, the QCOs, coupled with increase in import duties, have resulted in about 70 per cent decline in imports of toys while exports have increased. In the footwear sector too, the government has come up with QCOs for 24 products both in the leather and non-leather categories. The government is also considering a PLI scheme for train components to reduce dependence on imports, but discussions were at an initial stage and would need time to take concrete shape, the source added. Bringing e-bike parts under the scheme’s ambit had also been discussed. POINTERS * Substantial PLI savings likely due to under-subscription in some sectors *Govt to extend scheme to new sectors for fuller utilisation of Rs 1.97 lakh cr corpus *Toys, footwear & leather amongst front runners for inclusion in scheme *QCOs announced for toys, footwear to encourage production, investments * PLI scheme for train components at initial stages of discussion You Might Also Like [Noida Toll Bridge Co: Income Tax Appellate Tribunal quashes near ₹16,000-crore tax demand]( [Logistics]( [Noida Toll Bridge Co: Income Tax Appellate Tribunal quashes near ₹16,000-crore tax demand]( [As tur dal scarcity hits India, Mozambique turns opportunistic]( [Agri Business]( [As tur dal scarcity hits India, Mozambique turns opportunistic]( [Rupee sinks to new low against dollar]( [Forex]( [Rupee sinks to new low against dollar]( [Issuers seek relaxation on certain product categories for card network portability]( [Money & Banking]( [Issuers seek relaxation on certain product categories for card network portability]( Copyright @ 2023, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](