Toys, Footwear Among 6 Mfg Sectors To Be Brought Under PLI Scheme With Rs 180 Bn Incentive: Rep


The Centre is planning to offer over Rs 180 billion (approximately $2.2 billion) in incentives to promote domestic manufacturing in six new sectors. Sectors like chemicals, shipping containers, and vaccine input materials, are expected to be added to the government’s flagship production-linked incentive (PLI) scheme, reported Reuters attributing two government officials.

Introduced in 2021, the PLI scheme covers 14 sectors, spanning from electronic products to drones with an outlay of Rs 1.97 trillion. The officials told the news agency that the six new sectors expected to be added in the PLI scheme also include toys, bicycles, leather, and footwear. 

The report noted that while the PLI scheme has been working in some sectors it’s lagging in others. Only a portion of the PLI incentives has been utilised thus far, leading the government to consider reallocating the unused funds to new sectors.

Two government officials said that the limited disbursements under the scheme could result in substantial savings, which may be redirected to other sectors. The Rs 180-billion allocation for these new sectors will be derived from the original budget of the PLI scheme.

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The Centre views the PLI scheme as a vital tool for revitalising the broader economy, which has faced a dearth of private investment for nearly a decade and is grappling with the challenge of generating sufficient employment, particularly in the manufacturing sector, the report noted. 

In the last fiscal year, PLI incentives totaling Rs 29 billion were disbursed, as per the report. However, a government report, as seen by the news agency, said that minimal payouts were made to businesses in sectors such as specialty steel products, solar modules, and car components.

For the fiscal year 2023-23, incentives are anticipated te reach nearly Rs 110 billion. Furthermore, an internal government analysis suggests that these disbursements could climb to Rs 400 billion by the fiscal year 2024-25, according to an official.

“The disbursements should be better than this estimate after some tweaks to the scheme,” the official told Reuters, adding such changes would help speed up payouts and some sectors may get an additional year or two under the scheme.


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