PLI schemes evoke mixed response: IT, mobile steal a march on other sectors

 What is the News?

The production-linked incentive(PLI) schemes for several sectors have received a good response. However, the scheme is struggling across most other sectors where it has been rolled out.

 About PLI Scheme:

• The scheme aims to invite foreign investors to set up their manufacturing units in India. Similarly, it also aims to promote the local manufacturers to expand their manufacturing.
• Features: Under the Scheme, companies will get incentives on incremental sales from products manufactured in domestic units.
• Implementation: The scheme is implemented by the concerned ministries/departments.
• Sectors: PLI Scheme has been approved for various sectors such as automobiles, pharmaceuticals, IT hardware, mobile phones, telecom equipment, white goods, chemical cells, and textiles, etc.

Performance of the Scheme:

• The PLI Scheme has received the maximum number of applications for sectors such as food, mobile, electronic components manufacturing, IT hardware as well as telecom equipment manufacturing.
• On the other hand, sectors such as medical devices, textiles, automobile component manufacturing are struggling to find participants for the PLI scheme.
• The reason for low interest in these sectors is that most companies either do not meet the qualification norms for the PLI scheme or feel that the return on investment is low compared to the incentives announced.
  • Example: Investors in the steel sector are not very keen on applying under the scheme as they feel that the period of 5 years is too less to set up new units and start production from them or even expand old units.
  • In the case of PLI for automobile and automobile component manufacturing, most Indian companies do not meet the qualification norms and have avoided even applying for the scheme.