PLI scheme to account for 13-15% of capex in key sectors over 3-4 years: Crisil
‘Almost 60% of capex already approved, major spending set to occur over FY23-FY26’
‘Almost 60% of capex already approved, major spending set to occur over FY23-FY26’
The Production Linked Incentive (PLI) scheme will account for 13-15% of the average annual investment spending in key industrial sectors over the next three-four years, according to a report by Crisil.
Since its introduction in March 2020, the PLI scheme has been announced for 15 sectors, involving government incentives to the tune of ₹1.93 lakh crore. Of this, 50-60% is to be spent on sectors with domestic manufacturing and export focus, and the rest on import localisation.
“Implementation of the Production Linked Incentive (PLI) scheme will lead to a potential capital expenditure (capex) of ₹2.5-3 lakh crore over the scheme period and will account for 13-15% of average annual investment spending in key industrial sectors over the next 3-4 years,” the rating agency said in a report released on Wednesday.
PLI is now poised for a rapid on-the-ground execution, with almost 60% of the capex already approved and major spending set to occur over FY23-FY26. The capex has been approved for 10 sectors, it said.
While the capex in mobile, pharma and telecom sectors has already kicked off, that in capital-intensive sectors such as automobile and solar photovoltaics — which form 70% of the committed investment — will kick off from April 2022, the agency said.
The scheme has received interest from more than 900 players across sectors, of which about 350 have got approval so far.
Crisil Director Hetal Gandhi said PLI would spur green investments in India, with around 55% of the scheme expected to be green, in sectors such as electric vehicles/fuel cell electric vehicles, and solar photovoltaics.
The report said that along with supply-chain integration, PLI will aid exports too.
Of the 15 sectors, nine have export potential ranging from 20$ to 80% of the incremental revenue generated, the agency said, adding that this, in turn, could create an annual export potential of ₹2 lakh crore or 6% of the total exports of calendar year 2021.
Sectors that could benefit from exports include mobiles, pharma, food processing, IT hardware, white goods and specialty steel, the agency said.
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