India’s production linked incentive (PLI) scheme has generated investment commitments of ₹2. 34 lakh crore across 14 sectors, the Economic Times (ET) reported, quoting data collated from various ministries.
"Automobile and auto components, advanced chemistry cell batteries, specialty steel and high-efficiency solar panels have attracted the maximum interest. The government expects the scheme to generate additional output worth ₹28. 15 lakh crore and 6. 45 million new jobs over the next five years," said the ET report.
The government announced the PLI programme two years ago to encourage domestic manufacturing to offer a cash incentive for three to five years on the incremental sale of goods made in India over the determined base-year sales.
The beneficiaries are required to commit to a certain minimum investment in India.
“The PLI scheme is an initiative that has the potential to significantly enhance the scale of manufacturing in India — it has started off quite well,” ET quoted Pawan Goenka, chairman of SCALE Committee and former managing director of Mahindra & Mahindra, saying so.
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.
The Government of India launched the PLI scheme to help India become self-sufficient. The objective of this scheme is to boost domestic manufacturing, and also give incentives for incremental sales from products manufactured in domestic units. Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
Initially, this scheme has 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.
As these sectors are labour intensive and are likely, and the hope is that they would create new jobs for the ballooning employable workforce of India.