PLI Scheme for Ten More Sectors
- 12 Nov 2020
- 5 min read
Why in News
The Union Cabinet has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in 10 more sectors for enhancing India’s manufacturing capabilities and exports (Atmanirbhar Bharat).
- Earlier, the government had announced a production linked incentive or PLI scheme for medical devices, mobile phones and specified active pharmaceutical ingredients, with a proposed outlay of Rs. 51,311 crore.
- PLI Scheme:
- A scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.
- The scheme invites foreign companies to set units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units.
- Expansion of PLI Scheme to Ten More Sectors:
- The ten sectors include food processing, telecom, electronics, textiles, specialty steel, automobiles and auto components, solar photo-voltaic modules and white goods such as air conditioners and LEDs.
- The sectors had been identified on the basis of their potential to create jobs and make India self-reliant.
- The PLI scheme for these ten sectors will be operational for five years with a total estimated outlay of Rs 1.45 lakh crore.
- The PLI scheme will be implemented by the concerned ministries/departments.
- Savings from one PLI scheme of an approved sector can be utilized to fund another sector.
- The scheme for these sectors will be in addition to the PLI schemes for mobile phones and allied equipment manufacturing, pharmaceutical ingredients and medical devices.
- Several more pharmaceutical products have been brought under the aegis of the PLI scheme, including complex generics, anti-cancer and diabetic drugs, in-vitro diagnostic devices and special empty capsules.
- Benefits: The PLI scheme across these 10 key specific sectors will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain.
- Push to Digital Economy:
- Increase Exports:
- The Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. It contributes 3.5% of the total drugs and medicines exported globally.
- India is the world's second largest steel producer in the world. It is a net exporter of finished steel. A PLI scheme in Specialty Steel will help in enhancing manufacturing capabilities for value added steel leading to increase in total exports.
- Specialty steel is made by adding various elements to iron, to achieve various properties, such as heat resistance, hardness, and corrosion resistance.
- Secure Telecom Infrastructure:
- Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products.
- Doubling Farmers’ Income:
- The growth of the processed food industry leads to better price for farmers and reduces high levels of wastage.
- Push to Digital Economy:
- Growth in production and exports of industrial goods will greatly expose the Indian industry to foreign competition and ideas, which will help in improving its capabilities to innovate further.
- Promotion of the manufacturing sector and creation of a conducive manufacturing ecosystem will not only enable integration with global supply chains but also establish backward linkages with the MSME sector in the country.
- It will lead to overall growth in the economy and create huge employment opportunities.