Interacting with India Inc for information sharing and brainstorming on PLI schemes, Hon’ble Prime Minister Narendra Modi said in a recent webinar that the Union Budget and India's policy-making shouldn't just be restricted to a government process." Every stakeholder associated with the development of the country should have an effective engagement in it," the Prime Minister said during the recent webinar on PLI schemes.

For a USD 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology. To achieve all of the above, PLI schemes to create manufacturing global champions for an AatmaNirbhar Bharat have been announced for 13 sectors. For this, the government has committed nearly1.97 lakh crores, over 5 years starting FY 2021-22. This initiative will help bring scale and size in key sectors, create and nurture global champions and provide jobs to our youth.

The key announcements in the Union Budget related to Production Linked Incentive (PLI) scheme are as follows and we seek ideas and suggestions from the public and other stakeholders on the same:

Textile
To enable the textile industry to become globally competitive, attract large investments and boost employment generation, a scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme. This will create a world-class infrastructure with plug and play facilities to enable create global champions in exports. 7 Textile Parks will be established over 3 years.

The Textiles Sector generates employment and contributes significantly to the economy. There is a need to rationalize duties on raw material inputs to manmade textiles. We are now bringing nylon chain on par with polyester and other man-made fibres. We are uniformly reducing 35 the BCD rates on caprolactam, nylon chips and nylon fibre & yarn to 5%. This will help the textile industry, MSMEs, and exports, too

Capital Equipment and Auto Parts
There is immense potential in manufacturing heavy capital equipment domestically. We will comprehensively review the rate structure in due course. However, we are revising duty rates on certain items immediately. We propose to withdraw exemptions on tunnel boring machine. It will attract a customs duty of 7.5%; and its parts a duty of 2.5%. We are raising customs duty on certain auto parts to 15% to bring them on par with the general rate on auto parts.

Electronic and Mobile Phone Industry
Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers. For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from a ‘nil’ rate to a moderate 2.5%.

Iron and Steel
MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices. Therefore, we are reducing Customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels. To provide relief to metal recyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to 31st March 2022. Further, I am also revoking ADD and CVD on certain steel products. Also, to provide relief to copper recyclers, I am reducing duty on copper scrap from 5% to 2.5%.

MSME (related with steel)
We are proposing certain changes to benefit MSMEs. We are increasing duty from 10% to 15% on steel screws and plastic builder wares. On prawn feed, we increase it from 5% to 15%. We are rationalizing exemption on import of duty-free items as an incentive to exporters of 36 garments, leather, and handicraft items. Almost all these items are made domestically by our MSMEs. We are withdrawing exemption on imports of certain kind of leathers as they are domestically produced in good quantity and quality, mostly by MSMEs. We are also raising customs duty on finished synthetic gemstones to encourage their domestic processing.

Chemicals
We have calibrated customs duty rates on chemicals to encourage domestic value addition and to remove inversions. Apart from other items, we are reducing customs duty on Naptha to 2.5% to correct inversion.

Renewable Energy/ Solar
To give a further boost to the non-conventional energy sector, I propose to provide an additional capital infusion of `1,000 crores to Solar Energy Corporation of India and `1,500 crores to the Indian Renewable Energy Development Agency.

In Part A, we have already acknowledged that solar energy has huge promise for India. To build up domestic capacity, we will notify a phased manufacturing plan for solar cells and solar panels. At present, to encourage domestic production, we are raising duty on solar invertors from 5% to 20%, and on solar lanterns from 5% to 15%.

Last date of submission: 31st March 2021