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.
