The Indian government is highly optimistic about its Production Linked Incentive (PLI) Scheme, which was launched in April 2021 with an investment of Rs. 1.97 lakh crore. According to an official release, the scheme has attracted over Rs. 95,000 crore of investment, resulting in a production and sale worth Rs. 7.8 lakh crore and generating employment opportunities for over 6.4 lakh people.
While some scepticism exists, claiming that the overall impact may not be as positive as the government portrays, industry representatives consider the scheme a success. A representative from a premier business chamber expressed his approval, rating the PLI Scheme between 7 and 7.5 on a scale of zero to 10. The scheme was designed to bolster manufacturing in specific sectors, focusing on increasing production volume, exports, and job creation. Notably, sectors such as food processing, telecom equipment, and mobile have witnessed favourable outcomes.
Various industry bodies also offer favourable opinions on the PLI Scheme. The assistant secretary general of the PHD Chamber of Commerce & Industry noted that the initial impact has been positive and is expected to continue improving. While the share of manufacturing in India’s GDP has yet to rise, representatives believe it is too early to assess the full impact of the PLI Scheme.
Industry insiders emphasized that the PLI Scheme’s success should not solely rely on India’s large market size but instead focus on other factors that attract investors. The government’s approach to the scheme has been proactive and responsive, addressing concerns raised by industrialists. Although some shortcomings have been highlighted, such as the exclusion of job work in the textiles sector from investment calculations, the government has demonstrated its willingness to listen to industry concerns.
The PLI Scheme has also contributed to a significant increase in exports, amounting to Rs. 3.2 lakh crore. Additionally, approximately Rs. 2,900 crore in incentives were disbursed in 2022-23. With smartphones alone constituting $44 billion of the $101-billion total electronics production, including $11.1 billion in exports in 2022-23, the scheme’s success signals the potential for further growth and wider prosperity.
