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Government expands Production-Linked Incentive Scheme

  • IASbaba
  • October 23, 2020
  • 0
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Government expands Production-Linked Incentive Scheme

Part of: GS Prelims and GS-II – Policies and interventions & GS-III – Industry 

In news

  • The government will extend the production-linked incentive (PLI) scheme to eight more sectors to boost domestic manufacturing.

Key takeaways 

  • All the sunrise and important sectors are proposed to be covered in this.
  • The sectors may be automobile, networking products, food processing, advanced chemistry and solar PV manufacturing.
  • Through PLI Scheme, incentives will be paid only if the manufacturers make the goods.
  • This scheme will give cash incentives for five to seven years.

Important value additions 

PLI Scheme for Large Scale Electronics Manufacturing

  • The scheme proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including electronic components and semiconductor packaging.
  • Under the scheme, electronics manufacturing companies will get an incentive of 4 to 6% on incremental sales (over base year) of goods manufactured in India for a period of next 5 years.
  • The scheme shall only be applicable for target segments – mobile phones and specified electronic components.
  • With the help of the scheme, domestic value addition for mobile phones is expected to rise to 35-40% by 2025 from 20-25%. 
  • It shall also generate 8 lakh jobs more, both direct and indirect.

Do you know? 

  • The government has launched the PLI scheme for mobile phones (electronic manufacturing) and it was also extended to pharma products and medical equipment sectors.

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