Chennai: Consortium of Indian Associations (CIA) convenor K E Raghunathan has welcomed the announcements made by Finance Minister Nirmala Sitharaman.
In a statement, he said there are two announcements which are significant for the benefit of industry and improvement of society by Finance Minister. There is no doubt, this would invite investments and enable local products cost effective in the near future and CIA congratulates the government for the announcement of support.
On Performance Linked Incentives, he said that in the last few months, with the sentiments of boycott of Chinese materials and products growing, there was a scarcity of materials and the higher cost of local manufacturing was visibly felt.
This was evident especially in steel, airconditioning, refrigerators, copper, solar projects, auto sector etc., he said and added that in-fact, it had come to a stage of clamping the local demand and choking the exports as well.
In September, the government had also capped benefits under MEIS scheme and announced withdrawal of the same by 31 December for the exporters. Therefore, it has become necessary for the government to announce PLI for the local companies which are otherwise working on very thin margins and unable to sustain, Raghunathan said.
However, the appetite is filled by real food and not by menu card. We need to wait and see , what will be the PLI component, procedure of assessment, reimbursement of the same and if there is likely to be any cap over it, is it an alternative to any other similar schemes which are in vogue such as MEIS / ROSCTL etc.
Obviously production based incentive provides pay out in long run, has a higher lead time, it is based on consumption in the market, he said, adding: “What is actually more required currently as a priority is creation of market demand and volume pick up.”