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Cabinet Approval on November 11, 2020

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The Union Cabinet chaired by Prime Minister Narendra Modi has approved the following proposals which were detailed by Union Minister Prakash Javadekar, Ministry of Information and Broadcasting (MIB) and Nirmala Sitharaman, Ministry of Finance.

–Cabinet approves PLI Scheme worth Rs 1,45980 cr for Enhancing 10 key Sectors

Union Cabinet approved Production Linked Incentive (PLI) scheme worth up to Rs 1.46 lakh crore for 10 key sector. This decision has been taken to attract investments, boost manufacturing and enhance exports on the lines of the Atmanirbhar Bharat.

  • The PLI scheme will be implemented by the concerned ministries/departments and will be within the overall financial limits prescribed.
  • The final proposals of PLI for individual sectors will be appraised by the Expenditure Finance Committee (EFC) and approved by the Cabinet.
  • Notably, the sector of Automobiles & Auto Components have received the maximum incentive of Rs 57,042 crore, followed by Advance Chemistry Cell (ACC) Battery which got an incentive of Rs 18,100 crore.

Following table shows the recent allocation toward 10 key sectors:

PrioritySectorImplementing Ministry/DepartmentApproved Outlay over 5 year period (Rs.crore)
1.Advance Chemistry

Cell (ACC) Battery

NITI Aayog and Department of Heavy Industries18100
2.Electronic/Technology ProductsMinistry of Electronics and Information Technology5000
& Auto Components
Department of Heavy Industries57042
4.Pharmaceuticals drugsDepartment of Pharmaceuticals15000
5.Telecom & Networking ProductsDepartment of Telecom12195
6.Textile Products: MMF segment and technical textilesMinistry of Textiles10683
7.Food ProductsMinistry of Food Processing Industries10900
8.High Efficiency Solar PV ModulesMinistry of New and Renewable Energy4500
9.White Goods (ACs & LED)Department for Promotion of Industry and Internal Trade6238
10.Speciality SteelMinistry of Steel6322

Apart from the above approvals, there are already existing PLI Schemes viz. Mobile Manufacturing and Specified Electronic Components (Rs 40951 cr), Critical Key Starting materials/Drug Intermediaries and Active Pharmaceutical Ingredients APIs (Rs 6940 cr), Manufacturing of Medical Devices (Rs 3420 cr).

Points to be noted:

-India is expected to have a USD 1 trillion digital economy by 2025.

-The Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. It contributes 3.5% of the total drugs and medicines exported globally.

-The Indian textile industry is one of the largest in the world and has a share of 5% of global exports in textiles and apparel. Through PLI India’s share in manmade fibre (MMF) segment will get a boost.

-India is the world’s second largest steel producer in the world.

About Production Linked Incentive (PLI) scheme:

It is an outcome- and output-oriented scheme where incentives will be paid only if the manufacturers make the goods. It is a direct payment from budget.

–Cabinet approves Continuation and Revamping of the Scheme for Financial Support to PPP in Infrastructure Viability Gap Funding VGF Scheme

The Cabinet Committee on Economic Affairs (CCEA) approved continuation and revamping of the Viability Gap Funding (VGF) Scheme under the public private partnership (PPP) model till 2024-25 with a total outlay of Rs 8,100 crore.Rs.6,000 crore has been earmarked for PPP projects in the economic infrastructure segment and remaining Rs.2,100 crore for social infrastructure projects.

This decision has been taken to ramp up the social infrastructure of the country and to continue support to core sector Infrastructure. The revamped Scheme consists of following two sub-schemes for mainstreaming private participation in social infrastructure:

Sub scheme -1

This would cater to Social Sectors such as Waste Water Treatment, Water Supply, Solid Waste Management, Health and Education sectors etc. These projects face bankability issues and poor revenue streams to cater fully to capital costs.

  • The Central Government will provide maximum of 30% of Total Project Cost (TPC) of the project as VGF and State Government/Sponsoring Central Ministry/Statutory Entity may provide additional support up to 30% of TPC.

Sub scheme -2

This Sub scheme will support demonstration/pilot social sectors projects. The projects may be from Health and Education sectors where there is at least 50% Operational Cost recovery.

  • The Central Government will provide a maximum of 40% of the TPC of the Project. In addition, it may provide a maximum of 25% of Operational Costs of the project in first five years of commercial operations.
  • The projects may be from Health and Education sectors where there is at least 50% Operational Cost recovery. In such projects, the Central Government and the State Governments together will provide up to 80% of capital expenditure and upto 50% of Operation & Maintenance (O&M) costs for the first five years.

Recent Related News:

i.The Central Government is planning to extend all centrally sponsored schemes to the union territories (UTs) of Jammu and Kashmir (J&K) and Ladakh after revoking its special status under article 370 of its constitution. In this regard, the Union Cabinet approved changes in the criteria to extend benefits under the Deendayal Antyodaya Yojana.

ii.As a part of implementing the new National Education Policy (NEP), 2020, the Cabinet approved the implementation of Rs 5718 crore Strengthening Teaching-Learning and Results for States (STARS) project with a financial aid from World Bank amounting to US $500 million (approximately Rs. 3700 crore).