Cautious govt keeps an eye on PLI play
Being alert on criticism on desired results in implementation of production-linked incentive, Centre realized the need for course correction in PLI schemes in some areas
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- Govt never concealed failings of PLI schemes in certain sectors
- Official became cautious on PLI implementation amid rising criticism
- PLI resulted in 20-fold increase in women employment and localization in IT hardware sector
- PLI Scheme 2.0 is expected to result in broadening manufacturing ecosystem
New Delhi: While miffed by the criticism of certain shortcomings of the production-linked incentive (PLI) schemes, the government still believes that these should be viewed in its proper perspective. The success of PLI schemes should not be measured just in terms of boosting the targeted sectors, but in a more comprehensive manner, official sources told Bizz Buzz.
In February 2021 in Budget 2021-22, Finance Minister Nirmala Sitharaman had announced an outlay of Rs1.97 lakh crore for the PLI schemes for 13 key sectors. The objective was to create national manufacturing champions and generate employment opportunities for the country’s youth, the government claimed at that time.
While admitting the need for course correction in the PLI schemes in some areas, the sources said the gains have been considerable. In certain segments of IT hardware such as battery & laptops, there has been a 20-fold increase in women employment and localization. This was one of the reasons that last month the government came up with PLI 2.0 for IT hardware with support of Rs17,000 crore.
PLI Scheme 2.0 for IT hardware is expected to result in broadening and deepening of the manufacturing ecosystem by encouraging the localization of components and sub-assemblies and allowing for a longer duration to develop the supply chain within the country, an official press release said at its launch.
The official sources said that the government never concealed the failings of the PLI schemes in certain sectors, adding that Chief Economic Adviser V Anantha Nageswaran himself admitted to the issues involved.
Yet, the gains should not be underestimated. So far, import substitution of 60 per cent has been achieved in the telecom sector and India has become almost self-reliant in antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment). The drones sector has seen a seven times jump in turnover due to the PLI scheme which consists of all MSME Startups.
Under the PLI scheme for food processing, sourcing of raw materials from India has seen significant increase which has positively impacted income of Indian farmers and MSMEs.
Due to the PLI scheme, there has been a significant reduction in imports of raw materials in the pharmaceutical sector. Unique intermediate materials and bulk drugs are being manufactured in India including penicillin-G, and transfer of technology has happened in manufacturing of medical devices such as CT scan and MRI.
