PLI SCHEME (Syllabus: GS Paper 3 - Economy)

News-CRUX-10     12th August 2023        

Context: Even as the Union government looks to tweak the production linked-incentive (PLI) schemes for some sectors, it is expecting disbursals to likely increase to Rs 13,000 crore to eligible firms.

  • The government had disbursed Rs 2,900 crore till March 2023 out of claims worth Rs 3,400 crore received so far. 
  • The scheme was announced in 2021 for 14 sectors, including telecom, white goods, textiles, medical device manufacturing, automobiles, speciality steel, food products, solar PV modules and advanced chemistry cell batteries, with an outlay of Rs 1.97 lakh crore.

Production-linked incentive (PLI) scheme

  • About: The PLI scheme was conceived to scale up domestic manufacturing capability, accompanied by higher import substitution and employment generation.
  • Allocation in Budget: The government has set aside Rs 1.97 lakh crore under the PLI schemes for various sectors and an additional allocation of Rs 19,500 crore was made towards PLI for solar PV modules in Budget 2022-23.
  • Launch: Launched in March 2020, the scheme initially targeted three industries:
      • Mobile and allied Component Manufacturing
      • Electrical Component Manufacturing and
      • Medical Devices
  • Incentives Under the Scheme: calculated on the basis of incremental sales, range from as low as 1% for the electronics and technology products to as high as 20% for the manufacturing of critical key starting drugs and certain drug intermediaries.
      • In some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.
  • Sectors for the which PLI Scheme has been Announced: So far, the government has announced PLI schemes for 14 sectors including automobile and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and advanced chemistry cell batteries.