In a move aimed at propelling job creation and fostering growth in key sectors, the government is reportedly contemplating expanding the scope of the Production-Linked Incentive (PLI) scheme in the upcoming interim Budget. According to Deloitte, the PLI scheme, currently applicable to 14 sectors, may soon encompass industries such as garments, jewellery, and handicrafts.
Deloitte India Partner, Rajat Wahi, highlighted the need for the PLI scheme to reach sectors that are significant employment generators, including leather, garments, handicrafts, and jewellery. This expansion, if implemented, could play a pivotal role in supporting lower-income households and urban communities, contributing to a more inclusive economic growth.
The PLI scheme, launched in 2021 with an outlay of Rs 1.97 lakh crore, has thus far been instrumental in attracting over Rs 1.03 lakh crore in investments until November 2023. The scheme spans diverse sectors such as telecommunications, white goods, textiles, medical devices, automobiles, speciality steel, food products, solar PV modules, advanced chemistry cell battery, drones, and pharmaceuticals.
Deloitte’s Budget expectations report emphasizes the potential benefits of broadening the PLI scheme’s scope to encompass chemicals and services, citing it as a means to stimulate demand and propel manufacturing growth. The move aligns with the government’s commitment to sustainable growth in rural households, focusing on measures that boost disposable income in the rural economy.
The report also underscores the significance of the PLI schemes in supporting space tech startups. By encouraging local manufacturing and capacity building, the schemes can incentivize domestic production and attract investments. This aligns with the broader objective of making Indian companies and manufacturers globally competitive.
As of November 2023, PLI schemes have facilitated investments exceeding Rs 1.03 lakh crore, resulting in production and sales of Rs 8.61 lakh crore and the generation of over 6.78 lakh jobs. Over 746 applications across 14 sectors have been approved, with an anticipated investment of over Rs 3 lakh crore.
Deloitte’s report also indicates the necessity of extending PLI schemes to space tech startups, underlining the potential to boost local manufacturing and stimulate capacity building within the country. Such initiatives are expected to bolster domestic production and attract investments by offering financial incentives based on manufacturers’ output.
The interim Budget for 2023-24 is scheduled for presentation on February 1 by Finance Minister Nirmala Sitharaman, and all eyes are on the potential policy shifts and incentives that may be introduced to fuel economic growth and job creation across diverse sectors.