Production Linked Incentive Scheme 1.1

08.01.2025

Production Linked Incentive Scheme 1.1

Why in the news?         

                Recently, the union Minister of Steel and Heavy Industries launched the second round of the PLI scheme for Specialty Steel, termed as PLI Scheme 1.1.

About Production Linked Incentive Scheme 1.1:

• It will be implemented during the production period of FY 2025-26 to FY 2029-30.
• It covers five (5) product categories in line with the existing PLI Scheme, namely Coated / Plated Steel Products, High Strength / Wear resistant Steel, Specialty Rails, Alloy Steel Products & Steel wires and Electrical Steel.

○These products have a wide range of applications, from white goods to transformers to Automobiles and other niche sectors.

Changes in scheme:

○Reduction in threshold investment & capacity for the Cold-Rolled Grain-Oriented (CRGO) product sub-categories, allowing carry forward of excess production to the immediately following year for the purpose of claiming incentive and reduction in threshold investment under capacity augmentation mode.

○Not all companies would need to install new mills.

○Recognising the importance of producing quality steel, energy efficiency and other process improvements, companies investing in augmentation of existing capacities will be allowed to participate in the scheme.

• The Centre had earlier introduced the PLI scheme to encourage domestic production of specialty steel and lower imports by drawing in capital investments.
• It was initially launched for three sectors to address the need to boost domestic manufacturing during COVID-19 lockdown; the PLI scheme was later extended to include steel in November 2020.

About Cold-Rolled Grain-Oriented (CRGO) grade steel:

• It is a high-value steel used in production of power transformers used in HT power distribution. The technology to make CRGO is not available with any of the Indian steelmakers.

                                                                          Source: PIB

Consider the following statements regarding the Production Linked Incentive Scheme 1.1:

1. It covers products like Alloy Steel Products & Steel wires and Electrical Steel.

2. It is implemented during the production period of FY 2025-26 to FY 2029-30.

Which of the statements given above is/are correct?

A.1 only

B.2 only

C.Both 1 and 2

D.Neither 1 nor 2

Answer C