Production-linked incentive: Steel PLI application deadline likely to be extended, again

The deadline for submission of applications under the Rs 6,322-crore production-linked incentive (PLI) scheme for speciality steel is likely to be extended by a month till May 30. Several modifications under the scheme to include sub-categories and small players have necessitated extension of the deadline, sources said. The steel ministry has already had a round of discussion with the Cabinet secretary to finalise the modifications under the scheme.

The scheme is applicable to five broad product categories – coated or plated steel products, high strength or wear resistant steel, speciality rails, alloy steel products and electrical steel – and 25 product sub-categories.

The last date for submission of applications has been extended once already. While applicants were initially given the December 29-March 29 window to apply under the scheme, it was extended by over a month till April 30. The extension was given to accommodate some changes in the scheme as sought by the industry.

Meanwhile, the government, had in December, deferred by a year the implementation of the scheme. Instead of 2022-23 proposed earlier, the five-year scheme will commence from 2023-24. As such, the release of the incentives under the scheme will start from 2024-25 instead of 2023-24 proposed in the scheme guideline issued in October. The cabinet had approved the PLI scheme for speciality steel in July 2021.

Since the scheme is fund-limited, the incentive payable shall not exceed the budgeted allotment for the scheme. Further, the annual incentive payable shall be capped at `200 crore per eligible company, including that of group companies or joint ventures, across all product categories.

Specialty steel is a value-added variety wherein normal finished steel is worked upon by way of coating, plating, heat treatment, etc, to convert it into high value-added steel for use in various strategic sectors such as defence, space, power and automobiles, among others. India meets the domestic demand with imports, valued at around Rs 30,000 crore.

The objective of the PLI scheme is to promote manufacturing of speciality steel grades within the country and help the Indian steel industry mature in terms of technology as well as move up the value chain.

“It is expected that the speciality steel production will become 42 million tonne by the end of 2026-27. This will ensure that approximately Rs 2.5 trillion worth of speciality steel will be produced and consumed in the country which would otherwise have been imported. Similarly, the export of specialty steel will become around 5.5 million tonne as against the current 1.7 million tonne of specialty steel getting forex of Rs 30,000 crore,” the government had said.