APPROACH
The Introduction: Talk about core concept of PLI Scheme
The Body
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- Briefly talk about the rationale of the PLI Scheme
- Highlight the achievement of the Scheme with special focus on job, investment and sales
- Suggest the improvement needed to make the scheme even more functional
The Conclusion: Give an appropriate conclusion in this regard.
The Introduction:
The Production Linked Incentive (PLI) scheme links capital incentives to incremental production in targeted sectors. Its aim is to kick-start large-scale manufacturing in strategic areas like electronics, pharmaceuticals, solar, automobiles, etc. In the last few years, the scheme has become a central part of India’s industrial strategy to make the country a reliable global manufacturing hub.
The Body
Rationale of the PLI scheme
1. Correct market failures: PLI reduces the gap between India and low-cost competitors by incentivising localisation of supply chains.
2. Attract investment: Targeted, time-bound incentives draw both global and domestic firms to set up capacity in India.
3. Raise exports: India’s share in global manufacturing exports is less than 2%. Through export push from India, the aim is to achieve 1 trillion USD worth of merchandise exports by 2030.
4. Value addition: By encouraging domestic sourcing and higher value manufacturing, PLI aims to grow India’s share in global value chains.
5. Job creation: The scheme targets 60 lakh new job opportunities in the manufacturing sector.
6. Technology transfer: India wants to indigenise production through transfer of modern technology and reduce import dependence
Achievements
1. Investment and production: PLI schemes have attracted about Rs 1.7 lakh crore in committed investment and cumulative sales crossed more than Rs 16 lakh crore.
2. Jobs and exports: The scheme has supported over 11–12 lakh direct and indirect jobs and PLI-backed production has helped exports in the tune of Rs 5 lakh crore.
3. Electronics and mobile manufacturing: Electronics and mobile manufacturing ecosystem has got a boost. India became the world’s second largest mobile manufacturer with Apple and Samsung setting up their core production base in India.
4. Pharma and API: India has steadily reduced dependence on China for critical pharma ingredients and bulk drugs
5. White goods: A large level of capacities in ACs, LEDs and renewable equipment is being set up which is aimed at supporting both the consumers as well as green energy transition.
Challenges
Despite policy push, there are certain challenges which include low domestic value addition, lack of economies of scale, dependence on imports for critical components and limited global competitiveness. There are even allegations from different companies about low disbursal rate of subsidies as promised under the scheme.
Improvement in the scheme
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- Push deeper domestic value chains: Offer complementary incentives for component manufacturing (semiconductors, specialised inputs) so PLI shifts from assembly to upstream (or backward) value-addition.
- Boost MSME participation: Simplify compliance so smaller suppliers can plug into large firms’ value chains.
- Faster disbursal: Continue digitised dashboards and reduce procedural delay in incentive payouts.
- Link incentives to job and localisation targets: Make a portion of incentives dependent on domestic sourcing and employment generation.
- Green conditionality: Incentivise low-carbon processes to align with global markets’ sustainability standards.
The Conclusion
PLI has been a results-oriented industrial push delivering tangible wins in electronics and pharma and attracting large investments and exports. Yet performance varies across sectors. Fine-tuning the scheme will make PLI a more durable engine of manufacturing, employment and export growth for India.
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