India’s PLI Scheme: A Modest Start with Room for Improvement

The government will conduct a review of its ambitious production-linked incentive (PLI) scheme in order to address the initial challenges faced by beneficiaries. The main focus of the review will be on sectors that have shown slower progress than expected. Commerce and industry minister Piyush Goyal will lead the review meeting, which will involve officials from all the ministries responsible for implementing the PLI scheme, as well as the participating companies.

PLI Scheme

All About the PLI Scheme

The government has allocated ₹1.97 trillion for the PLI scheme, which covers 14 key sectors including telecom, textiles, automobiles, white goods, and pharmaceutical drugs. The scheme aims to boost domestic manufacturing, create employment opportunities, reduce cheap imports, and increase exports. So far, the government has disbursed ₹2,874 crores to beneficiaries in eight sectors, namely mobile manufacturing, IT hardware, pharmaceutical drugs, bulk drugs, medical devices, telecom, food products, and drones.

image 56 India's PLI Scheme: A Modest Start with Room for Improvement

Nevertheless, there has been lackluster progress observed in the remaining six sectors, namely steel, textiles, battery, white goods, solar PV, and automobiles. Incentive disbursements for these sectors have not yet begun, and individual ministries are currently conducting a detailed analysis to determine the reasons behind the slow progress.

To improve the scheme’s efficiency, Ajay Srivastava, a former official of the trade ministry and the founder of the Global Trade Research Initiative (GTRI), recommends that the government exercise caution regarding the possible misapplication of the incremental sales criteria when providing PLI incentives.

Srivastava’s report also recommends simplifying the criteria for the scheme to prevent misuse, as the current requirements, such as thresholds for investments, production, sales, localization, and input usage, can be challenging for manufacturers to fulfill. The report proposes that the focus should be on incentivizing local production of components rather than the final product.

image 57 India's PLI Scheme: A Modest Start with Room for Improvement

Madan Sabnavis, the chief economist at Bank of Baroda, points out the difficulty of monitoring how the PLI scheme is being utilized, especially in cases where companies expand their operations. He suggests that the scheme should be a one-time incentive and should not be extended beyond the end date to avoid companies becoming overly dependent on it.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More like this

PLI Scheme Adjustments Anticipated as Government Aims for ₹13,000...

The government is making adjustments to certain production-linked incentive (PLI) schemes that have not garnered sufficient interest....

44 IT Hardware Companies Enroll for PLI Benefits: A...

A top government official has disclosed that forty-four companies, including prominent brands, have submitted applications for incentives...

Samsung may loose PLI incentives over invoice issues

Samsung Electronics may be forced to forego perks during the first year of its production-linked incentive (PLI)...

The production-linked incentive scheme may increased to Rs 17000...

The government, which wants global IT companies such as Dell, HP, Apple, and Samsung to expand manufacturing...

How will Apple’s retail venture in India impact its financial...

With devices like the iPad, iPhone, and MacBook being popular names, Apple has long been a powerful player...

LATEST NEWS

OnePlus 13T Sets New AnTuTu Record with Over 3 Million Score

The OnePlus 13T is just weeks away from its official launch, but it has already made an impressive appearance on AnTuTu. Well, according to...

ISL 2024-25: Javi Hernandez’s Late Heroics Hand Jamshedpur FC Crucial First-Leg Edge Over Mohun Bagan Super Giant

Jamshedpur FC took a significant step towards the Indian Super League (ISL) 2024-25 final with a dramatic 2-1 victory over Mohun Bagan Super Giant...

Smart Samsung Cooling: Goodbye Sleepless Summers with Style!

Imagine a world where your air conditioner and fan work in perfect harmony, creating the ideal sleeping environment without you lifting a finger. Samsung...

IPL 2025: Venkatesh, Arora Star as KKR Hand SRH Their Biggest-Ever Loss

Kolkata Knight Riders (KKR) rediscovered their explosive batting form in Mumbai, while Sunrisers Hyderabad (SRH) continued their struggles, suffering a third consecutive defeat despite...

Featured