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What is the PLI scheme?

by Uddipana Gogoi

PLI scheme stands for Production linked incentive scheme introduced in March 2020. The PLI scheme was introduced with the aim to boost domestic manufacturing and cut import bills. Under this scheme the companies will get incentive on their incremental sales over the next five years period. Initially only three sectors were introduced for the scheme but in November 2020, ten more sectors were introduced for providing incentive. .The 13 sectors identified for incentive under this scheme are-

  • Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs): Department of Pharmaceuticals
  • Large Scale Electronics Manufacturing: Ministry of Electronics and Information Technology
  • Manufacturing of Medical Devices: Department of Pharmaceuticals
  • Electronic/Technology Products: Ministry of Electronics and Information Technology
  • Pharmaceuticals drugs: Department of Pharmaceuticals
  • Telecom & Networking Products: Department of Telecommunications
  • Food Products: Ministry of Food Processing Industries
  • White Goods (ACs & LED): Department for Promotion of Industry and Internal Trade
  • High-Efficiency Solar PV Modules: Ministry of New and Renewable Energy
  • Automobiles & Auto Components: Department of Heavy Industry
  • Advance Chemistry Cell (ACC) Battery: Department of Heavy Industry
  • Textile Products: MMF segment and technical textiles: Ministry of Textiles
  • Specialty Steel: Ministry of Steel

Features of PLI scheme

  1. Firstly, It is an outcome and output oriented scheme.
  2. Secondly, the scheme provides incentive to boost domestic manufacturing only.
  3. Furthermore, it helps to increase export and decrease import.
  4. Finally this scheme will give cash incentives for five to seven years and all the sunrise and important sectors.

Under this scheme, the government aims at achieving the following targets:

  • Firstly, to make India an integral part of the global supply chain and enhance exports.
  • Secondly India is expecting to have a USD 1 trillion digital economy by 2025 as it expects the demand for electronics to increase under its projects like Smart City and Digital India.
  • Further, it makes the Indian automotive Industry more competitive and will enhance the globalisation of the Indian automotive sector
  • Moreover, to make the Indian Textile Industry is one of the largest in the world.
  • Furthermore, to make India the second-largest producer of steel in the world.
  • Finally, telecom, solar panels, pharmaceuticals, white goods, and all the other sectors introduced can contribute to the economic growth of the country and make India a manufacturing hub globally.

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