Union Cabinet on Thursday approved a Production Linked Incentive (PLI) Scheme worth Rs 6,322 crore for speciality steel production for five years. The duration of the scheme will be five years, from 2023-24 to 2027-28. It is expected that an investment of Rs 39,625 crore investment will be made in speciality steel production. Under this scheme, there will also be a cap of Rs 200 crore for each company.
The scheme will serve the purpose of boosting the production of high-grade speciality steel in the country. It will also be used to cover coated or plated steel products as well as high-strength or wear-resistant steel, speciality rails, alloy products, steel wires and even electrical steel.
Apart from boosting production, the government aims to use this scheme to lead to enhanced exports and minimising dependence on imports for high-end steel. The scheme is also expected to bring in an additional investment of approximately 40,000 crores and capacity addition of 25 Metric tonnes, the cabinet said in a statement. It will also play a part in combating unemployment in the country to a certain degree as this scheme will bring an additional 5,25,000 jobs to the table of which 68,000 will be direct employment.
The aim of this PLI speciality steel scheme is to address the issue of India’s disproportionate level of imports when it comes to steel. As a nation, we import the vast majority of our steel. The reason is that there is a severe ‘disability’ as the government puts it, faced by the steel industry. The Cabinet reported that it stands around USD 80-100 per ton, on account of higher logistics and infra cost, higher power and capital cost as well as higher taxes and duties.
The objective of the PLI scheme for speciality grade steel is to therefore address this glaring weak point by incentivising the production of speciality steel within the country. The Scheme aims to incentivise eligible manufacturers by paying between 4 per cent to 12 per cent incentives on incremental production noted the cabinet in a press release on Thursday. “PLI incentives will also help the Indian steel industry mature in terms of technology and move up the value chain," added the cabinet.
The Cabinet also made it clear that any company in India that is manufacturing these identified ‘speciality steel’ grades will be eligible to take part in this scheme. These companies will however need to fulfil the condition that the base steel used to make the speciality steel is poured and melted in the country. This ensures that the process meets the goal of end-to-end manufacturing within the country, while also keeping to the Prime Minister’s, Atmanirbhar Bharat’.
Approval of Ladakh Central University and Integrated Multi-Purpose Corporation
On a separate note, the Union Cabinet also approved the establishment of the Central University of Ladakh. This comes at a budget of Rs 750 crore. The government aims to address regional imbalances at the higher educational level and promote overall growth and development in the Union Territory.
To aid in the facilitation of these endeavours, the government is also putting into place an integrated multi-purpose corporation in Ladakh. This corporation will serve the function of aiding infrastructure cooperation in Ladakh. It will also act as the primary construction agency in the Union Territory.
The cabinet has announced that there will be a budgetary allocation of Rs 25 crore share capital to the corporation. This will enable the corporation to be the first organisation solely dedicated to the development of infrastructure in the region. It will work towards developing the industry, tourism, transport and marketing of local products and handicrafts.
The government also cleared the way for a new post to be filled by a Managing Director with a salary of Rs.1,44,200 to Rs.2,18,200. The cabinet has put the recurring annual expense of operations at Rs 2.42 crore.
The aim of this new entity (the Corporation) will be to increase the domestic production of goods and services and will facilitate their smooth supply in the region, as well as ensure socio-economic development of the entire region and population of the Union Territory. This will consequently help further the development of human resources in Ladakh, stated the Cabinet.