A Rs 2,600 crore PLI scheme for footwear and leather sector could be in the works

The leather industry, led by the Council for Leather Exports, has been seeking an extension of the PLI scheme for some time now.

The Central government’s ambitious PLI scheme has increased investment prospects in domestic manufacturing. The scheme has been launched in 13 sectors identified by the government with a total outlay of around Rs 2 lakh crore.

The scheme was first introduced in March 2020, and in her 2021-2022 Budget speech, Finance Minister Nirmala Sitharaman announced an outlay of Rs 1.97 lakh crore for the PLI scheme. The scheme aims to boost domestic manufacturing under the Atmanirbhar Bharat initiative of the government. According to the Commerce Ministry, the PLI scheme is expected to boost production worth an estimated $500 billion in five years since its introduction.

Production-linked incentive is a conventional and popular strategy used by governments to boost the production of goods considered necessary for job creation, social welfare and taxation. PLIs are essentially financial incentives for businesses to augment their output. They could come in the form of tax rebates, lowered import and export duties or easier land acquisition norms.

The benefits of a PLI scheme are generally passed on to the end consumers of goods in the form of lower costs.