Govt – Welfare oriented Govt schemes, their utility
Production Linked Incentive (PLI) Scheme
The $23 billion Production-Linked Incentive (PLI) scheme, launched in 2020 to boost domestic manufacturing and reduce dependence on China, is set to lapse as many firms failed to meet production targets.
The scheme was aimed at increasing manufacturing’s share in India’s GDP to 25% by 2025, but it has declined from 15.4% to 14.3% instead.
Only 37% of the expected production target was achieved, with $151.93 billion worth of goods manufactured by October 2024.
94% of the $620 million incentives disbursed (April-Oct 2024) went to pharmaceuticals and mobile phones, highlighting uneven sectoral success.
About the PLI Scheme
It aims to boost domestic manufacturing, increase import substitution, and generate employment.
The scheme initially targeted three industries: Mobile and Allied Component Manufacturing, Electrical Component Manufacturing and Medical devices.
Later, it was expanded to 14 key sectors.
Under this scheme, Domestic and Foreign companies receive financial incentives based on a percentage of their incremental revenue for up to five years.
