There is a growing demand from industry for expansion of the ₹1.97 lakh crore Production Linked Incentive (PLI) scheme in the upcoming Budget to include new sectors and products, but the government is in a dilemma whether it should do so immediately. The scope should be increased or instead focus on successfully completing the schemes in the existing 14 sectors.
“Demands from the industry are continuously coming for extension of PLI scheme in their areas. Consultation is ongoing. But until things are finalized at all levels, we cannot make any announcement. The focus is on successfully completing the scheme in the existing 14 sectors. Let’s see how things progress and whether there is any announcement in the budget,” said a senior government official. business Line,
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sector in focus
The new sectors and products the industry is pushing for include many labor-intensive items such as toys, shoes and leather, electronics components, jewellery, handicrafts, apparel made from all fabrics and shipping containers.
“To create more employment opportunities in the country, we hope that the upcoming budget will expand the PLI scheme not only to the existing sectors, but also to sectors like chemicals and services, leather, textiles, jewelery and other consumer goods Will increase the scope. India needs to increase its export share,” said PHDCCI President Sanjeev Aggarwal.
Interestingly, despite token provisions being made for PLI in toys and leather and footwear sectors in the interim budget announced on February 1, no announcement has been made yet.
In 2021, the Center had announced PLI scheme for 13 sectors (later extended to one more sector) with an outlay of ₹1.97-lakh crore to encourage local production in strategic sectors and encourage exports . Assistance under the scheme is to be provided over a period of five years on the basis of minimum investment and turnover.
The 14 sectors include mobile manufacturing and specified electronic components; pharmaceutical intermediates and APIs; medical devices; Automobiles and components; Pharmaceuticals, special steel, telecommunication products; Electronic/Technology Products; White goods, food products, textiles (MMF segment and technical textiles), high-efficiency solar PV modules, ACC batteries, and drones and components.
So far, the scheme has proven successful in only a few sectors, most importantly in mobile manufacturing, and to a lesser extent in sectors such as electronics, food processing and pharmaceuticals.
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Investment
As per latest estimates, the PLI scheme has attracted ₹1.5-lakh crore investment (total investment expectation is ₹3-4-lakh crore), generating an output of ₹8-9-lakh crore, of which ₹3-3.5- Lakh crores were exported, the official said. The total disbursement of incentives is around ₹10,000 crore, but was mostly in a few sectors.
“There are some sectors like automobile, white goods and solar modules which are in the nascent period where we may see some more momentum in the coming years. Then there are some others like textiles and special steel where they may require some changes to make them more attractive to investors,” the official said.
(With inputs from KR Srivatsa and Abhishek Law)
