PLI not at all good for SME-dominated sectors
The central government should not extend fiscal support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicraft as the move may shift business away from those enterprises, think tank GTRI said in a report on Monday.
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New Delhi: The central government should not extend fiscal support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicraft as the move may shift business away from those enterprises, think tank GTRI said in a report on Monday.
Global Trade Research Initiative (GTRI) said small firms need assistance like access to technology and low-cost finance and not PLI. It also said PLI for industries like food processing or auto, where many domestic manufacturers make similar products, introduces competitive distortion by giving money to a few firms. “PLI money at the rate 4-6 per cent of incremental sales could increase profit margins by 30-40 per cent, giving a considerable price advantage over others,” GTRI Co-Founder Ajay Srivastava said.