PRODUCTION LINKED INCENTIVE (Syllabus: GS Paper 3 – Economy)

Context: The Cabinet secretary-led committee has raised concerns regarding significant delays in disbursing incentives to eligible companies under the under the production-linked incentive (PLI) scheme.

Pproduction-linked incentive (PLI) scheme

• Objectives of PLI Schemes:

oAttract investments in key sectors and cutting-edge technology.

oEnsure efficiency and economies of size and scale in the manufacturing sector.

oMake Indian companies and manufacturers globally competitive.

• Incentives: The incentives under the scheme are calculated based on incremental sales, with specific sectors like advanced chemistry cell batteries, textile products, and the drone industry also factoring in sales performance and local value addition over a five-year period.
• Funding: Outlay of Rs. 1.97 lakh crore (over US$26 billion) to enhance India's Manufacturing capabilities and Exports.
• 14 sectors covered under the scheme: (i) Mobile Manufacturing and Specified Electronic Components, (ii) Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients, (iii) Manufacturing of Medical Devices (iv) Automobiles and Auto Components, (v) Pharmaceuticals Drugs, (vi) Specialty Steel, (vii) Telecom & Networking Products, (viii) Electronic/Technology Products, (ix) White Goods (ACs and LEDs), (x) Food Products, (xi) Textile Products: MMF segment and technical textiles, (xii) High efficiency solar PV modules, (xiii) Advanced Chemistry Cell (ACC) Battery, and (xiv) Drones and Drone Components.