Operating expenditure support
Also called: Opex support, Opex assistance · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
Operating expenditure support (opex support) is money the government pays a producer to help with the running costs of a plant. Running costs are the day-to-day costs of making goods, such as raw materials, power and wages. It is usually paid per unit made and sold, so it closes the gap between the cost of making a good at home and the price of importing it. It differs from capital-side support, which helps pay for building the factory. Because nothing is paid until goods are actually sold, the government pays only for real output. The risk is that the money stays unspent if few firms reach production.
Example
The Container Manufacturing Promotion Scheme (CMPS) was approved by the Union Cabinet in October 2026 with an outlay of Rs 10,000 crore. It pays opex assistance for each container that meets global shipping standards and is sold, to offset the cost gap with imported containers. Separately, it gives a 3% a year interest subvention on term loans to cover the capital side.
Don't confuse with
- Interest subvention: the government pays part of the interest on a loan, which lowers the cost of building the plant (capital side). It is paid whether or not the plant sells anything.
- Production-linked incentive (PLI): pays a percentage of a firm's incremental sales over a base year (FY20 for the 2020-21 schemes). The reward is for growth in sales, not a fixed payment per unit to cover a cost gap.