The government may expand the scope of Production-Linked Incentive (PLI) schemes and top up it for the existing sectors in the Union Budget 2023, said an Economic Times (ET) report.
"India is likely to substantially top up the allocation for ongoing Production-Linked Incentive (PLI) schemes in the February 1 budget after seeing good results, said people with knowledge of the matter. Some new sectors may be included in the programme that seeks to reignite manufacturing in India and boost exports, along with other measures to spur investments," said the ET report.
"Finance minister Nirmala Sitharaman had in the FY22 budget announced ₹1.97 lakh crore for PLI schemes that now cover 14 key sectors. This incentive amount, which is for the five-year period beginning FY22, may be raised in the budget," the report added.
Earlier, Mint had reported that the government may announce PLI for petrochemicals in the Budget.
As per the report, the government was working on a PLI scheme worth ₹10,000 crore for chemicals and petrochemical industries as the country aims to triple its capacity to manufacture these key ingredients by 2040.
The Government of India created the PLI scheme with the objective of boosting domestic manufacturing and also giving incentives for incremental sales from products manufactured in domestic units.
Apart from inviting foreign companies to set up shops in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
The PLI is an old and popular tool used by governments to encourage the production of goods deemed necessary for social good, taxation, or job creation.
Initially, this scheme targeted three industries – mobile manufacturing and electric components, pharmaceutical (critical key starting materials/active pharmaceutical ingredients), and medical device manufacturing.
Later this concept expanded with schemes rolled out for multiple sectors to boost India’s manufacturing capabilities and encourage export-oriented production.
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