{"id":247846,"date":"2023-06-14T20:06:52","date_gmt":"2023-06-14T14:36:52","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=247846"},"modified":"2023-06-14T20:06:52","modified_gmt":"2023-06-14T14:36:52","slug":"the-right-incentive-pli-scheme-alone-would-not-be-enough","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-right-incentive-pli-scheme-alone-would-not-be-enough\/","title":{"rendered":"The right incentive – PLI scheme alone would not be enough"},"content":{"rendered":"\n

Source:\u00a0<\/b>The post is based on the article\u00a0\u201cThe right incentive – PLI scheme alone would not be enough\u201d<\/b> published in the Business Standard <\/b>on\u00a014th <\/strong>June\u00a0<\/b>2023<\/b><\/p>\n

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

Relevance<\/strong>: About issues with PLI Scheme.<\/p>\n

News<\/strong>: The government is planning to hold a first-of-its-kind meeting to address implementation issues being faced by producers under the production-linked incentive (PLI) scheme.<\/p>\n

About the PLI Scheme<\/span><\/h2>\n

The government cleared the first three PLI schemes in March 2020, while another 10 were approved in November that year. The allocation for the scheme was announced in Union Budget 2021-22, with the idea of creating national manufacturing champions, which would generate employment opportunities.<\/p>\n\n\n\n
Must read:\u00a0Production-Linked Incentive or PLI Schemes and its challenges \u2013 Explained, pointwise<\/span><\/span><\/a>\u00a0<\/span><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

What are the challenges associated with the implementation of the PLI Scheme?<\/h2>\n

According to the latest numbers, the gross value added in manufacturing went up by just 1.3% at constant prices in 2022-23. This highlights that the schemes seem to have multiple issues. Such as,<\/p>\n

Lack of clarity: <\/strong>In the auto industry, firms are looking for clarity on the incentives they are supposed to get. It has been reported that incentives could not be disbursed in 2022-23 because no auto company presented the required documents.<\/p>\n

Lack of disbursements<\/strong>: Manufacturers are affected by disbursements in other sectors as well. For instance, in 2022-23, the government paid Rs. 2,874 crore to beneficiaries against a claim of Rs.3,420 crore. The outgo thus was about only 1.4% of the Rs. 1.97 trillion allocated for the scheme over a period of five years.<\/p>\n

Aside from the documentation issues, the outgo has been low because the scheme has possibly not resulted in the kind of investment that was envisaged.<\/p>\n

Affects competition<\/strong>: Investment and production in different sectors depend on a variety of factors. The state\u2019s decision to select champions and provide fiscal incentives could affect competition. Like Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme, manufacturers might use different ploys to take advantage of subsidies.<\/p>\n\n\n\n
Read more: <\/strong>An analysis of PLI (production-linked incentive) scheme \u2013 Explained, pointwise<\/strong><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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

Policymakers should not excessively depend on the PLI scheme. It is not a way out of the inadequacies in the manufacturing sector.<\/p>\n

Modern manufacturing depends on complex supply chains and giving fiscal incentives to one set of producers may not work. So, the government will have to work on improving the overall industrial environment.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source:\u00a0The post is based on the article\u00a0\u201cThe right incentive – PLI scheme alone would not be enough\u201d published in the Business Standard on\u00a014th June\u00a02023 Syllabus: GS 3 \u2013 Changes in industrial policy and their effects on industrial growth. Relevance: About issues with PLI Scheme. News: The government is planning to hold a first-of-its-kind meeting to… Continue reading The right incentive – PLI scheme alone would 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":[10503,216],"class_list":["post-247846","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/247846","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=247846"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/247846\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=247846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=247846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=247846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}