{"id":243142,"date":"2023-05-19T20:29:03","date_gmt":"2023-05-19T14:59:03","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=243142"},"modified":"2023-05-19T20:29:03","modified_gmt":"2023-05-19T14:59:03","slug":"measuring-success-increasing-pli-allocation-will-not-be-enough","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/measuring-success-increasing-pli-allocation-will-not-be-enough\/","title":{"rendered":"Measuring success: Increasing PLI allocation will not be enough"},"content":{"rendered":"\n

Source:\u00a0<\/strong>The post is based on the article\u00a0\u201cMeasuring success: Increasing PLI allocation will not be enough\u201d <\/strong>published in the Indian Express <\/strong>on\u00a019th\u00a0May 2023.<\/b><\/strong><\/p>\n

Syllabus<\/strong>: GS \u2013 3: changes in industrial policy and their effects on industrial growth.<\/p>\n

Relevance<\/strong>: About PLI Scheme 2.0 for IT Hardware.<\/p>\n

News<\/strong>: The Union Cabinet has recently approved an updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing with more fund allocation.<\/p>\n

About the updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing<\/h2>\n\n\n\n
Must read: Centre more than doubles outlay on PLI for IT hardware to \u20b917,000 crore<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

What are the key changes in the PLI Scheme 2.0 for IT Hardware?<\/h2>\n

-The updated scheme now has a budgetary outlay of Rs. 17,000 crore, compared to the previous allocation of Rs. 7,325 crore.<\/p>\n

-The tenure of the scheme has also been increased to six years from four years.<\/p>\n

-The average incentive has been enhanced to 5% compared to 2% offered in the previous version.<\/p>\n

-Companies using local components will now get additional incentives.<\/p>\n

What are the expected benefits of PLI Scheme 2.0 for IT Hardware?<\/h2>\n

With the modified scheme, the government expects an investment of Rs. 2,430 crore in the sector during the given period.<\/p>\n

India needs to create a large number of manufacturing jobs for its ever-rising workforce. Hence, with the updated scheme, the Centre expects to create 75,000 direct jobs and boost production by Rs. 3.35 trillion.<\/p>\n

About the potential of Electronics manufacturing in India<\/h2>\n

Electronics manufacturing has been witnessing consistent expansion with a 17% compound annual growth rate (CAGR) over the past eight years. The annual production value is estimated to have crossed $105 billion, or about Rs. 9 trillion.<\/p>\n

India has emerged as a trusted supply-chain partner for global players and large companies are willing to invest in India.<\/p>\n

Why increasing allocation for PLI Scheme 2.0 for IT Hardware is not enough?<\/h2>\n

The earlier version did not yield results despite investment<\/strong>: Various reports have shown\u00a0that the target for electronics manufacturing would be missed by a significant margin by 2025-26. Exports would be around only 53-55% of the stated target.<\/p>\n

In the case of IT hardware, in particular, against the target of $25 billion, production is estimated to touch only about $6 billion.<\/p>\n

The extension of financial support is not the correct way to attract investment<\/strong>: The financial support might cause a)<\/strong> the subdued performance of firms<\/strong> in different sectors, b)<\/strong> In the long run, they might develop heavy dependence on PLI<\/strong>, c)<\/strong> deviate focus<\/strong> from create enabling conditions<\/strong> for a large and diverse manufacturing base in the country and d)<\/strong> fiscal incentive can be only one of the many variables determining actual investment<\/strong> decisions.<\/p>\n

What should be done?<\/h2>\n

The government should re-evaluate the scheme to help drive long-term investment and balance India\u2019s aversion to large trade agreements.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source:\u00a0The post is based on the article\u00a0\u201cMeasuring success: Increasing PLI allocation will not be enough\u201d published in the Indian Express on\u00a019th\u00a0May 2023. Syllabus: GS \u2013 3: changes in industrial policy and their effects on industrial growth. Relevance: About PLI Scheme 2.0 for IT Hardware. News: The Union Cabinet has recently approved an updated Production Linked… Continue reading Measuring success: Increasing PLI allocation will not be enough<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-243142","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704766121},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/243142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=243142"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/243142\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=243142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=243142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=243142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}