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What Is the Production Linked Incentive (PLI) Scheme?

The PLI scheme incentivises manufacturing companies to undertake the production of goods in local or domestic manufacturing units. It aims to increase employment in the country and reduce our dependence on imported goods. Auto components and automobiles, electronics, mobile phones, telecom, medical devices, pharmaceutical ingredients, food processing, speciality steel, manufacturers of LEDs and air conditioners and solar photo-voltaic modules are the sectors entitled to benefit under the scheme.

Last year, mobile phone makers and manufacturers of electronic components such as diodes, resistors, transistors, etc. were offered an incentive of 4 to 6 percent. Manufacturers of LED lights, air conditioners, and other white goods also received incentives in the range of 4 to 6 percent. Several companies in the food processing industry were offered a 10 percent incentive for six years of the scheme from the year 2022 to 2027.

Also Read: Schemes to Help Manufacturing MSMEs Grow?

Eligibility for PLI Scheme

The eligibility criteria for the PLI scheme for different sectors. For example, manufacturers of mobile phones belonging to the MSME sector must invest a minimum of ₹10 Crore, while other companies need to invest at least ₹100 Crore. The company must have a cumulative investment that meets the threshold criteria starting from the base year up to the year under consideration. The year 2019-2020 will be considered as the base year.

For other sectors, the threshold criteria may also take into account the cumulative sale value of manufactured units. MSMEs in the food processing industry must hold over 50 percent of the stock in their companies. The selection will depend on the uniqueness of their products, their proposals, and levels of product development.

How to Apply?

Any company that is registered in India can apply online for the scheme. The application will be examined by the Ministry of Electronics and Information Technology (MeitY) or Project Management Agency (PMA). The PMA will make recommendations to the Technical Committee (TC) and wait for its report. Both reports by the PMA and TC will be forwarded to the Empowered Committee (EC), which will issue the final approval.

What Is the Lean Manufacturing Competitiveness (LMC) for MSMEs Scheme?

Under the scheme, the Ministry of MSME will provide assistance to MSMEs in matters related to the management of personnel and inventory, utilisation of space, reducing the time it takes to manufacture products, optimisation of processed flows, and so on. This scheme aims to make MSMEs in the manufacturing industry more competitive and reduce their manufacturing costs. This scheme will empower local companies to improve the quality of their product and deliver goods that match national and international standards.

Big companies have always taken advantage of lean manufacturing techniques to improve their efficiency. MSMEs, however, are either unaware or cannot afford the services of lean manufacturing consultants or counsellors (LMC). The purpose of this scheme is to help MSMEs implement and reap the benefits of lean manufacturing techniques. The Ministry of MSME will provide financial assistance to MSMEs to cover the fees of LMCs.

Eligibility for the Scheme

You will need to form a mini cluster (MC) comprising at least 10 MSME units. Upon successful registration as a Special Purpose Vehicle (SPV), you need to enter a Memorandum of Understanding (MoU) with the other units in the MC. The SPV will pay the first instalment corresponding to 20% of the total bill to the LMCs. They can file an application with the National Monitoring and Implementing Unit (NMIU) for reimbursement. The Ministry of MSME will forward the subsequent five instalments of 20% each to the NMIU, which will be responsible for covering the fees of the LMCs.

How to Apply?

The SPV must send an application to NMIU in the prescribed format as provided in the guidelines.

What Is the MSME Quality Management Standards (QMS) and Quality Technology Tools (QTT) Scheme?

This scheme is known for 'enabling the manufacturing sector to be competitive through QMS and QTT’. It is yet another initiative by the Ministry of MSME to empower MSMEs in the manufacturing industry by encouraging them to understand and adopt Quality Management Standards (QMS) and Quality Technology Tools (QTT). It helps MSMEs to carry out an in-depth study of similar products that foreign companies manufacture for the Indian market. Through the workshops and seminars sponsored under this scheme, the MSMEs can gain the necessary knowledge to manufacture better quality products.

Eligibility for the Scheme

MSMEs that have entrepreneur’s memorandum and have been in existence for a minimum of two years can apply for this scheme. The Ministry of MSME will offer financial support of up to ₹79,000 per programme to the expert organisations. These organisations will hold QMS/QTT awareness campaigns for MSMEs. The Ministry of MSME will also offer financial support of up to ₹2.5 Lakh to implement QMS/QTT in selected MSME units through expert organisations.

How to Apply?

MSMEs that wish to apply can do so by getting in touch with the office of the DC-MSME.

What Should Be Your Next Steps?

  • Complete your MSME/Udyam Registration at the earliest.
  • Determine which schemes are applicable for your business and apply for relevant subsidies.
  • Explore new product ideas for your business. Several government YouTube channels provide information related to the manufacturing of different kinds of products.
  • Visit to stay updated with the latest information on government initiatives for MSMEs.

Also Know: nexarc, is one such portal where you can register your business for free,   and manage your business easily.

We value the pivotal role of emerging businesses in our Nation’s economic growth and prosperity, and believe in empowering them to be deeply aware, widely connected and digitally integrated. Offering a host of economical and highly-relevant business capabilities, Tata Business Hub aims to be the catalyst, propelling emerging businesses into new frontiers of growth and performance.

Digital marketing specialist at ABCR News.
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