Govt may increase allocation for PLI schemes in Budget to boost exports
January 18, 2023
Under the PLI scheme, eligible players receive incentives for five years if they achieve their investment and production value target for each year
After seeing positive results, the government is likely to increase the allocation for the ongoing Production-Linked Incentive (PLI) schemes by as much as 20-30 per cent in the next Budget to spur domestic manufacturing and boost exports, The Economic Times reported Wednesday.
Citing people familiar with the matter, ET reported that electronic manufacturing and IT hardware, which have seen a high impact of PLI schemes, are high on the agenda for an increase in allocation. There are also possibilities that some new sectors could be included under the scheme. The scheme currently covers 14 key sectors.
“Overall allocation under PLI could be enhanced… It is a scheme that is seen to be making an impact on the ground,” one of the persons aware of the deliberations told ET. Another person said the increase could be 20-30 per cent.
Recently, Union MoS for Electronics and IT Rajeev Chandrasekhar said that the government is likely to roll out an IT hardware PLI scheme. He said it may also offer additional incentives for manufacturers.
Under the PLI scheme, eligible players receive incentives ranging from 4-6 per cent of production value for five years if they achieve their investment and production value target for each year.
In her Budget proposals last year, finance minister Nirmala Sitharaman had announced Rs 1.97 trillion for PLI schemes. This incentive amount was for a five-year period beginning FY22 and this is likely to be raised.
As global manufacturers eye newer geographies to diversify their supply chains away from China, India is working to send a clear and strong signal that can it be an attractive destination for them.
Many experts too believe that the government should build on the initial success of the PLI scheme as it has shown encouraging results.
[The Business Standard]