Spotlight Sep 16: Production Linked Incentives in Key Sectors: A Boost To Make In India – https://youtu.be/NzQ2DH_6vEU 

ECONOMY

Production Linked Incentives in Key Sectors – Part 1

Context: Production linked incentive (PLI) scheme aims at boosting domestic manufacturing and exports, is expected to –

Why is the production linked scheme needed?

According to experts, the idea of PLI is important as the government cannot continue making investments in these capital intensive sectors as they need longer times for start giving the returns. Instead, what it can do is to invite global companies with adequate capital to set up capacities in India. The kind of ramping up of manufacturing that we need requires across the board initiatives, but the government can’t spread itself too thin. Electronics and pharmaceuticals themselves are large sectors, so, at this point, if the government can focus on labour intensive sectors like garments and leather, it would be really helpful.

How will it incentivize manufacturing ops?

The production-linked incentive scheme gives eligible manufacturing companies a 4-6% incentive on incremental sales over the base year of 2019-20 for a five-year period. The PLI scheme will incentivize large domestic and global players to boost production, build a competitive ecosystem and lead to more inclusive growth.

A. For Pharmaceuticals: Part of the umbrella scheme for the Development of Pharmaceutical Industry, the objective is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector.

B. For IT Hardware: The scheme proposes production linked incentive to boost domestic manufacturing and attract large investments in the value chain of IT Hardware. 

C. For Telecom Sector: To make India a global hub of manufacturing telecom equipment including core transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment, Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices, Other Wireless Equipment and Enterprise equipment like Switches, Routers etc.

D. For Large Scale Electronics Manufacturing

E. For Food Processing Industry’(PLISFPI): For implementation during 2021-22 to 2026-27 with an outlay of Rs. 10,900 crore.

Note: Part 2 of the article will cover PIL for Specialty Steel, Textile Sector, Auto Sector, Drone Sector, Battery Storage, Solar PV cells and White Goods.

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