Production Linked Incentive (PLI) Scheme

News: RTI data reveals that PLI schemes have generated 5.84 lakh direct jobs by June 2024, which is about 36% of the 16.2 lakh direct jobs planned for the next five years across 14 sectors.

About Production Linked Incentive (PLI) Scheme

• The PLI scheme was launched in March 2020 to strengthen India’s domestic manufacturing sector and improve its role in the global supply chain.
• The scheme initially focused on three industries: mobile and allied component manufacturing, electrical component manufacturing, and medical devices. It was later expanded to cover 14 sectors.
• In the PLI scheme, Domestic and Foreign companies receive financial rewards for manufacturing in India, based on a percentage of their revenue over up to five years.
• Targeted sectors: 

Incentives under PLI

• Under the PLI scheme, eligible companies are provided financial incentives based on the increase in sales of products manufactured in India.
• These incentives motivate companies to invest in improving their manufacturing capabilities, adopting advanced technologies, and expanding production capacities.

PLI compared to traditional subsidies

• Limited Eligible Sectors: The PLI scheme is designed to attract substantial investments and scale rapidly, maximizing returns in terms of increased production, employment, and exports.
• Time-bound Investment and Production Commitments: Due to its pre-committed levels of investment and production, it cannot be considered a subsidy scheme.
• Support for Emerging Technologies: The scheme focuses on supporting technologies that can be commercially scaled, such as advanced chemistry cell batteries and electronic and technology products.