Lithium ion cells, PCBs may get local manufacturing sops

NEW DELHI: After mobiles and basic & bulk drug manufacturing, the government is looking at incentive schemes for other sectors such as lithium ion batteries and printed circuit boards (PCBs).
While the commerce and industry ministry is working on a plan to support the domestic production of several items, sources said the finance ministry is not in favour of offering the performance-linked incentives (PLIs) to products such as air-conditioners, furniture and segments of the textiles industry that several government agencies and industry bodies are demanding.
Tightening the flow of funds, North Block has indicated that savings from the Merchandise Exports of India Scheme (MEIS), where it has capped the outgo at Rs 9,000 crore during April-December, can be used for incentivising domestic production of goods, which are currently being imported and widening the trade deficit. The outgo on MEIS was estimated at Rs 43,000 crore last year.

The commerce and industry ministry has already put in place a blueprint for over a dozen industry groups, while starting work with industry captains on adding another eight sectors, including TV sets, CCTV equipment, set-top boxes, electric vehicle components, medical devices, sports & gym goods and lithium ion batteries.
“The idea is to focus on goods that are high technology and require value addition, instead of things like furniture which is run of the mill,” said a senior finance ministry officer. Incidentally, the finance ministry had opposed the performance-linked incentive scheme for mobile phones, questioning the need for an expenditure of around Rs 40,000 crore. It finally went through after the ministry of electronics and IT and NITI Aayog explained that the sops would create jobs and generate revenue in future.
The proposals, put together, require large investment. For instance, to make India a large base of AC manufacturing, an investment of around Rs 1 lakh crore is required.
Another officer said that the government recognises that there is a need to provide support to encourage domestic manufacturing, especially when imports from countries such as China were being discouraged. But the idea is to prioritise expenditure.
Some of the initiatives, such as setting up of a footwear park, are being pursued by the private sector.