The PLI scheme stands for Production Linked Incentive Scheme. With this scheme, the Government of India aims to boost domestic manufacturing. Additionally, it attracts investments in the target segments of the products. As a result of all this, it encourages “Make in India” too. Moreover, the PLI intends to attract global investments, generate large-scale employment opportunities and enhance exports substantially. Ergo, ‘Atmanirbhar Bharat’ Abhiyan also gets a major boost with this flagship scheme in different sectors.
- Firstly, boosting domestic manufacturing and attracting investments.
- Secondly, increasing exports of ‘Make in India’ products.
- Thirdly, to prepare a database in such a way that it captures the value addition, actual exports against commitment made, and job creation.
- The prime objective of the PLI scheme above all is to make manufacturing in India globally competitive. For this reason, removing sectoral disabilities, creating economies of scale, and ensuring efficiencies become all the way more important.
- Along with all this, the scheme is working towards creating a complete component ecosystem in India. Consequently, making India an integral part of the global supply chain.
The story so far:
- Initially, the PLI scheme was launched in only 3 targetted industries. They were:
- Mobile and allied components manufacturing,
- Electrical component manufacturing
- Medical devices
- Taking this agenda forward, the government has so far introduced PLI schemes for 14 sectors namely:
- automobile and auto components,
- electronics and IT hardware
- solar modules
- metals and mining
- textiles and apparel
- white goods
- advanced chemistry cell batteries, etc.
- However, calculating the incentives on the basis of incremental sales. It ranges from 1% for electronics and technology products to 20% for manufacturing critical key starting drugs and certain intermediaries.
- Furthermore, in some sectors such as advanced chemistry cell batteries, textile products, and the drone industry, the incentive to be given will be calculated on the basis of sales, performance, and local value addition done over the period of five years.
With all this in mind, Niti Ayog is working towards setting criteria that would help track the output of the companies which avail financial rewards. There is a lack of parameters to understand the value added by the companies under PLI. Neither there is any centralized database to track the jobs created, nor there is a measurement for rising exports & quality improvement under PLI. Moreover, most companies rely on one or two supply chains, which when disrupted leave the companies unqualified for incentives. Therefore, a need for a Plan of Action has aroused. Launched in March 2020, the journey and impact creation of the flagship PLI scheme by the current government would be interesting to note.