PLI Scheme
The Union Cabinet on the 11th of November 2020 approved Production Linked Incentive (PLI) scheme worth up to Rs 1.46 lakh crore for 10 key sectors in a bid to boost India’s manufacturing capabilities and enhancing exports. The scheme will make Indian manufacturers globally competitive, attract investment and enhance exports.
The decision of the Union Cabinet was announced by information and broadcasting minister Prakash Javadekar along with finance minister Nirmala Sitharaman in New Delhi.
The aim is to give the right impetus to the Indian economy to enable the nation to plug into global supply chains, Sitharaman told reporters. There is no cap on the number of companies that will be eligible for PLI under each category for now, she added.
The manufacturing sector currently contributes 16% to India’s GDP, Javadekar said adding that the idea was to increase this share. Among sectors, auto components and automobile sectors have received the maximum incentive of ₹57,000 crore, Javadekar said.
Key Features
It is a scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.The scheme invites foreign companies to set units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units.
Benefits
- The PLI scheme will make Indian manufacturers globally competitive,attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain.
- India is expected to have a USD 1 trillion digital economy by 2025. Additionally, the Government's push for data localisation, Internet of Things, projects such as Smart City and Digital India are expected to increase the demand for electronic products.
- India is the world's second largest steel producer in the world. It is a net exporter of finished steel. A PLI scheme in Specialty Steel will help in enhancing manufacturing capabilities for value added steel leading to increase in total exports.
- Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products.
- The growth of the processed food industry leads to better price for farmers and reduces high levels of wastage.
(Disclaimer : This blog is for information purposes only)
