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Over 1,300 units operational under PLI scheme; to generate jobs
Industry News- Sep 03,24
Preliminary calculations suggest that the production of Rs 10 trillion under the PLI scheme should translate to incentives worth Rs 500 billion.
As of now, over 1,300 units have been established under the ambitious Production Linked Incentive (PLI) scheme, primarily in sectors such as food processing, large-scale electronics, pharmaceuticals, medical devices, telecom, and drones. More than half of these units are already operational, producing goods worth approximately Rs 10 trillion and creating 700,000-800,000 jobs, according to official sources.
The disbursement of PLI incentives to these units has been around Rs 100 billion, which is relatively modest considering the scheme's total outlay of Rs 1.97 trillion. However, the government anticipates a significant acceleration in incentive disbursement over the next two to three years, as many of these operational units are in their first year of production and need to complete audits before claiming incentives.
"The Rs 1.5 trillion investment made under the PLI scheme, announced in 2021, has been funneled into 1,300 units. About half of these units have begun production, with the rest in various stages of implementation. It's only a matter of time before they start claiming incentives, as investors are committed to the scheme," a source familiar with the matter.
Preliminary calculations suggest that the production of Rs 10 trillion under the PLI scheme should translate to incentives worth Rs 500 billion. However, the fact that only Rs 100 billion has been disbursed so far indicates that many units are yet to complete the mandatory minimum one year of production required to claim incentives. Additionally, some sectors have longer gestation periods, with incentives available at later stages.
Among the 1,300 units set up under the PLI scheme, the food processing sector has the highest number of units, although investments in this sector are relatively low due to the predominance of small and medium enterprises.
Large-scale electronics manufacturing, including mobile phones, is the most significant in terms of size, volume, and monetary value. The medical device sector, which has attracted major players like GE, Philips, and Siemens, is also seeing high-value production of advanced equipment such as MRI, CAT scan, and X-ray machines.
The PLI scheme, introduced in 2021 with an outlay of Rs 1.97 trillion for 13 sectors (later extended to 14), aims to incentivize local production in strategic areas and boost exports. The scheme provides support based on minimum investments and turnover over a five-year period.
While the scheme has been notably successful in sectors like mobile manufacturing, electronics, food processing, and pharmaceuticals, others—such as textiles, steel, and solar PV—are still in the gestation phase. These sectors are expected to gain momentum in the coming years, especially as certain schemes are being revamped to attract more investment.
(BusinessLine)
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