The Central government’s ambitious Production-linked Incentive (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 is aimed at boosting 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.
What is the PLI scheme?
The 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.
For instance, the PLI scheme for large-scale electronics manufacturing in India offers incentive to promote domestic manufacturing and draw significant investments in mobile phone manufacturing and distinctive electronic components like the ATMP units.
The scheme will have a huge positive impact on the electronics manufacturing segment and will support the country to establish itself as a global leader in the segment.
Similarly, while electric vehicles (EVs) do not have an immediate demand, a shift to greener vehicles is necessary for the country's future. The government has a programme called the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme to drive the adoption of electric-powered vehicles.
There are numerous benefits for EV manufacturers under this scheme including a direct subsidy to consumers who purchase an EV.
Some of the identified sectors for PLI scheme are electronic or technology products, high-efficiency solar modules, specialty steel, pharmaceutical drugs, telecom & networking products, food products, automobile and auto components, textile manufacturing and advanced chemistry cell battery.
(Edited by : Thomas Abraham)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha elections: 4th phase sees over 68% voter participation, West Bengal leads with 76% turnout
May 14, 2024 1:47 AM
Lok Sabha elections phase 4 witnesses around 63% voter turnout, experts weigh in on key contests
May 14, 2024 12:06 AM
Lok Sabha Election 2024: Shiv Sena UBT’s Arvind Sawant highlights Uddhav Thackeray's vision for Mumbai’s progress
May 13, 2024 9:21 PM
Exclusive interview: 'Southern states will be a big surprise,' says PM Modi
May 13, 2024 9:05 PM