As a result, instead of 2023-24 as proposed in the scheme guideline announced in October, the release of incentives under the scheme would begin in 2024-25.
The application deadline for the Rs 6,322-crore production-linked incentive (PLI) scheme for specialty steel is set to be extended by a month, to May 30. Several changes to the system, including the inclusion of sub-categories and small players, have prompted an extension of the deadline, according to sources. The steel ministry has already held a meeting with the Cabinet Secretary to finalize the scheme’s adjustments.
The scheme covers five broad product groups and 25 product subcategories: coated or plated steel products, high strength or wear-resistant steel, specialty rails, alloy steel goods, and electrical steel.
The application deadline has already been extended once. Applicants were given a window from December 29 to March 29 to apply for the plan, but it was extended by nearly a month to April 30. The extension was granted to allow for some adjustments to the plan that were requested by the sector.
Meanwhile, the administration postponed the scheme’s implementation by a year in December. The five-year plan will begin in 2023-24, rather than the previously scheduled 2022-23. As a result, instead of 2023-24 as proposed in the scheme guideline announced in October, the release of incentives under the scheme would begin in 2024-25. In July 2021, the cabinet authorized the PLI program for specialty steel.
The incentive payable shall not exceed the budgeted allotment for the scheme because it is a fund-limited scheme. Furthermore, the annual incentive given across all product categories, including group firms and joint ventures, will be capped at ‘200 crore per qualified enterprise.
Specialty steel is a value-added variety in which conventional finished steel is transformed into high-value-added steel through the coating, plating, heat treatment, and other processes for usage in a range of strategic areas such as defense, space, power, and cars, among others. Imports worth around Rs 30,000 crore help India meet domestic demand.
The PLI scheme’s goal is to encourage domestic production of specialty steel grades and to assist the Indian steel sector is maturing technologically and moving up the value chain.
“Specialty of steel production is estimated to reach 42 million tonnes by the end of 2026-27.” This will result in the production and consumption of around Rs 2.5 trillion worth of specialty steel in the country, which would otherwise be imported. Similarly, specialty steel exports will increase to about 5.5 million tonnes from the present 1.7 million tonnes, generating forex of Rs 30,000 crore, according to the government.
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