Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel

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Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel

Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel

Recently, the Union Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel.

Key points and importance of the scheme:

  • The period of ‘Production-linked Incentive (PLI) Scheme for Specialty Steel’ will be of 5 years from the year 2023-24 to the year 2027-28.
  • The objective of this scheme is to promote the production of high grade specialty steel in the country.
  • Three slabs of PLI incentive have been prescribed under this scheme. The lowest slab is 4 percent and the highest is 12 percent, which will be given for Electrical Steel (Cold Rolled Grain Oriented Steel -CRGO).
  • The total budgetary outlay under this scheme is ₹6322 crore.
  • The plan is expected to entail an investment of about Rs 40,000 crore, and increase the capacity to 25 million tonnes for special steel.
  • The scheme will provide employment to about 5, 25, 000 people, out of which 68,000 will be direct employment.

Coverage:

Following are the 5 categories of Specialty Steel selected under the Production Linked Incentive (PLI) scheme:

  1. Coated/Plated Steel Products
  2. High Strength / Wear Resistant Steel
  3. Specialty Rail
  4. Alloy Steel Products & Steel Wire
  5. electrical steel

What is ‘Specialty Steel’?

  • ‘Specialty steel’ or ‘specialty steel’ is value-added steel. Normally finished steel is developed through coating, plating, heat treatment etc. to convert it into high-value added steel.
  • This steel can be used in various strategic applications like defence, space, power apart from automobile sector, specific capital goods.

Why was ‘Specialty Steel’ chosen for ‘PLI Scheme’?

  • In the year 2020-21, out of 102 million tonnes of steel produced, only 18 million tonnes of value-added steel or special steel was produced in the country.
  • Further, out of imports of seven million tonnes during the same period, about 4 million tonnes were imported only of special steel, resulting in foreign exchange expenditure of about Rs.30,000 crore.
  • By becoming self-reliant in the production of special steel, India will move up the steel value chain and come at par with advanced steel producing countries like Korea and Japan.

Source – The Hindu

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