Ministry of Commerce & Industry: Government Schemes | Indian Economy for UPSC CSE PDF Download

Production Linked Incentive Scheme (PLI) For White Goods (Air Conditioners And Led Lights) Manufacturers In India

1. Boost domestic manufacturing and attract large investments in the White Goodsmanufacturing value chain.
2. Removing sectoral disabilities, creating economies of scale, enhancing exports,creating a robust component ecosystem and employment generation

Salient Features

1. The scheme will be implemented by the Department for Promotion of Industry and Internal Trade.
2. The scheme will be implemented over FY 2021-22 to FY 2028-29 with a budgetary outlay of Rs. 6,238 crore.
3. Support under the Scheme will be provided to companies/entities engaged in manufacturing of components of Air Conditioners and LED Lights.
4. Incentive: An incentive of 4% to 6% on incremental sales (net of taxes) over the base year of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year and one year of gestation period.
5. Eligibility:
   • Incentive under the Scheme shall be provided to Companies making brown field or green field Investments for manufacturing in target segments in India.
   • Eligibility of Companies shall be subject to their meeting the pre-qualification criteria for different target segments.
   • Eligibility shall be subject to thresholds of cumulative incremental investment and incremental sales (net of taxes) of manufactured goods (as distinct from traded goods)over the base year for the respective year
   • The first year of investment will be FY 2021-22 and the first year of incremental sale will be FY 2022-23. Actual disbursement of PLI for a respective year will be subsequent to that year.
6. The Scheme is Fund Limited and even in case of over achievement the total pay-out of incentives would be capped at the amount approved by Cabinet.
7. The Empowered Group of Secretaries (EGoS) chaired by Cabinet Secretary will monitor the PLI scheme.

Startup India Seed Fund Scheme

• The Scheme was announced during the ‘Prarambh: StartupIndia International Summit’ which marked the five-year anniversary of the Startup India initiative.

Key Points

• About the Startup India Seed Fund Scheme (SISFS):
  • Aim: To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
  • Launched by: Department for Promotion of Industry and Internal Trade (DPIIT) with an outlay of Rs. 945 Crore.
  • Some Eligibility Conditions:
    • A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
    • Startups should not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme.
  • Features:
    • It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
    • An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
    • Grants of upto Rs. 5 crore will be provided to the eligible incubators selected by the committee.
    • The selected incubators will provide grants of up to Rs. 20 lakh for validation of proof of concept, or prototype development, or product trials to startups.
    • Investments of up to Rs. 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
  • Expected Benefit:
    • It will help in creating a robust startup ecosystem in Tier 2 and 3 regions, as the smaller towns in India are often not provided with appropriate funding.
• About Startup India Initiative:
  • It envisages building a robust Startup ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs. It was launched in 2016.
  • The action plan of this initiative focuses on following three areas:

    • Simplification and Handholding.

    • Funding Support and Incentives.

    • Industry-Academia Partnership and Incubation.

• Related Government Initiatives:

  • Startup Innovation Challenges: It is a fantastic opportunity for any startup to leverage their networking and fund-raising efforts.

  • National Startup Awards: It seeks to recognize and reward outstanding startups and ecosystem enablers that are contributing to economic dynamism by spurring innovation and injecting competition.

  • Ranking of States on Support to Startup Ecosystems: It is an evolved evaluation tool aimed to strengthen the support of States and UTs to holistically build their startup ecosystems.

  • SCO Startup Forum: The first-ever Shanghai Cooperation Organisation (SCO) Startup Forum was launched in October 2020 to develop and improve startup ecosystems collectively.

  • Prarambh: The ‘Prarambh’ Summit aims to provide a platform to the startups and young minds from around the world to come with new ideas, innovation and invention.

Seed Funding

• It typically represents the first official money that a business venture or enterprise raises.
• It helps a company to finance its first steps, including things like market research and product development.
• There are many potential investors in a seed funding situation: founders, friends, family, incubators, venture capital companies and more.
• One of the most common types of investors participating in seed funding is a so-called "angel investor."
  • Angel investors tend to appreciate riskier ventures (such as startups with little by way of a proven track record so far) and expect an equity stake in the company in exchange for their investment.

Department for Promotion of Industry and Internal Trade

• The department was earlier called Department of Industrial Policy & Promotion and was renamed as DPIIT in January, 2019.
• It comes under the Ministry of Commerce and Industry.
• In 2018, matters related to e-commerce were transferred to the Department and in 2019, the Department was given charge for matters related to Internal Trade, welfare of traders and their employees and Startups.
• The role of DPIIT is to promote/accelerate industrial development of the country by facilitating investment in new and upcoming technology, foreign direct investment and support balanced development of industries.
• Major engagements of DPIIT:
  • Business Reform Action Plan (BRAP) ranking of states,
  • Industrial Corridors,
  • Invest India,
  • Make in India initiative, etc.

Make in India

Objectives 

• To promote India as an important investment destination and a global hub in manufacturing, design and innovation

Salient Features

• New Processes: It recognizes ‘ease of doing business’ as the single most important factor to promote entrepreneurship.
  • New Infrastructure: Government intends to develop industrial corridors and smart cities, create world class infrastructure with state-of-the-art technology and highspeed communication. Innovation and research activities are supported through a fast paced registration system and improved infrastructure for IPR (intellectual property right) registration.
  • New Sectors: FDI has been opened up in Defence Production, Insurance, Medical Devices, Construction and Railway infrastructure in a big way.
  • New Mindset: In order to partner with industry in economic development of the country. Government shall act as a facilitator and not a regulator. An Investor
  • Facilitation Cell (IFC) dedicated for the Make in India campaign was formed with an objective to assist investors in seeking regulatory approvals, hand-holding services through the pre-investment phase, execution and after-care support.
  • Department for Promotion of Industry and Internal trade (DPIIT) coordinates action plans for 15 manufacturing sectors while Department of Commerce coordinates 12 service sectors.
• Targets under the scheme:
  • Increase in manufacturing sector growth to 12-14% per annum over the medium term.
  • Increase in the share of manufacturing in the country’s Gross Domestic Production from 16% to 25% by 2022.
  • To create 100 million additional jobs by 2022 in manufacturing sector

Service Exports from India Scheme (SEIS) 

1. It was launched under the Foreign Trade Policy (FTP), 2015-20 replacing the earlier scheme ‘Served from India Scheme’. In June 2020, the validity of the SEIS was extended for one more year on account of COVID-19 pandemic.
2. Objective: To encourage and maximize export of notified services from India. SEIS shall apply to `Service Providers’ located in India instead of `Indian Service Providers’.
3. Thus, SEIS provides for rewards to all Service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider. Under SEIS, the service providers of notified services are incentivized in the form of Duty Credit Scrips at the rate of 3 or 5% on their net foreign exchange earnings. 
4. These SEIS scrips are transferrable and can also be used for payment of a number of Central duties/ taxes including the basic customs duty.