Production Linked Incentive scheme (PLI) has become a crucial part of Hon’ble Prime Minister’s vision of making India a $ 5 trillion economy. In the post-pandemic scenario, PLI is proving to be a huge catalyst in creating ‘AatmaNirbhar Bharat’.

Sector-specific Focus:  

PLI scheme is strengthening India’s manufacturing sector by incentivising domestic and foreign investments and by developing global champions in the manufacturing industry.

The scheme currently targets 14 sectors of strategic and economic importance for India’s economic growth. By providing targeted incentives and support to sectors like electronics, automobiles, pharmaceuticals and MedTech devices, food, telecom, solar, textiles, drones, the scheme encourages companies to invest in areas where India has the potential to become a global leader. 

Through the PLI scheme, the government is encouraging companies to increase their manufacturing capabilities by spending on plant, machinery, equipment and associated utilities, R&D, and transfer of technology. The government, in turn, is providing incentives for a period up to five years on the increased manufacturing. The percentage of incentives varies for various sectors keeping in mind the specific needs of the industry.

As a result of the policies, early estimates of the impact of PLI scheme show encouraging trends in some sectors. As per the Economic Survey, the PLI scheme for large-scale electronics manufacturing has attracted an investment of INR 4,784 crore and contributed to a total production of INR 2.04 lakh crore, including exports of INR 80,769 crore (as of September 2022). As per the data released by the Ministry of Electronics and Information Technology, PLI scheme for large scale electronics has emerged as the most successful scheme while generating an employment of 28,636 and leading to a 139 per cent increase in exports of smartphones over the last three years. Similarly, under the scheme, the automobile and auto component industry has attracted proposed investment of INR 74,850 crore over a period of five years.

According to the Indian Staffing Federation, this massive boost in production due to the PLI scheme has the potential to double the existing workforce across sectors.

PLI scheme has also been applauded by the industry as Mr Sandip Patani, Director, Microtex Processors Pvt Ltd, in interaction with Invest India, called it “a major boost for the manmade and technical textile sector manufacturing in India” whereas Ms Shuba Nagesh, India Head Supply Chain, Wipro GE Healthcare, termed it “a huge shot in the arm of the medical industry.”

Future Prospects

As many other beneficiaries have emphasised, the PLI scheme is emerging as a game-changer for many critical and emerging industries. Hon’ble Prime Minister also highlighted, “Not only is it benefiting the PLI sector for which the scheme is meant, it will greatly benefit the entire ecosystem associated with that sector.”

The schemes are likely to demonstrate positive results in increasing manufacturing, job creation, and export. For instance, the PLI scheme is likely to facilitate the expansion of food processing capacity by nearly INR 30,000 crores and create additional direct and indirect employment opportunities for about 2.5 lakh persons by the year 2026-27.Similarly, in the pharmaceutical sector, the PLI scheme aims to boost domestic production of critical drugs and reduce dependence on imports. 

The government is actively monitoring the progress of the PLI schemes and making necessary adjustments to enhance its effectiveness. Continuous engagement with industry stakeholders, streamlining of processes, and ensuring ease of doing business are some of the measures taken to facilitate the smooth implementation of the schemes.