Introduction

The Production Linked Incentive (PLI) scheme, launched in 2020, aims to boost domestic manufacturing, attract investments, and enhance India’s global competitiveness. It provides financial incentives linked to incremental production in key sectors, aligning with the “Make in India” vision and supporting the Atmanirbhar Bharat initiative.

Rationale of the PLI Scheme

• Boost Domestic Manufacturing and Self-Reliance: Launched in 2020 under Make in India and Atmanirbhar Bharat, PLI provides performance-linked financial incentives to expand production in key sectors.
• Reduce Import Dependence and Enhance Strategic Security: Focuses on electronics, APIs, pharmaceuticals, and solar modules to cut reliance on imports and strengthen critical industries.
• Integrate India into Global Value Chains: Attracts domestic and global investment, positioning India as a competitive alternative in global manufacturing.
• Create Jobs and Enhance Export Competitiveness: Incentives linked to incremental sales generate large-scale employment and boost exports.
• Promote Technological Upgradation: Encourages firms to adopt advanced technologies and invest in innovation to maintain competitiveness.

Achievements of the PLI Scheme

• Major Investment Mobilization: By 2025, the scheme attracted over ₹1.7 lakh crore in investments across sectors.
• Robust Production and Sales Growth: Incremental production exceeded ₹16.5 lakh crore across approved sectors.
• Employment Generation: Created over 12 lakh direct and indirect jobs nationwide.
• Export Expansion: PLI-supported industries contributed more than ₹4 lakh crore in exports, with mobile phone exports making India one of the top 5 smartphone exporters.
• Improved Domestic Value Addition: In mobiles, local value addition rose to nearly 23%, reflecting deeper domestic manufacturing.
• Electronics and Mobile Sector: In the electronics sector, mobile phone manufacturing now accounts for half of India’s total output, with a 3 times increase in exports since FY 2020-21.

Ways in which Functioning and Outcomes can be improved

• Enhanced Monitoring and Evaluation: Implement a robust performance-tracking system with digital dashboards for real-time monitoring of delays and underperformance.
• Simplification of Procedures: Simplify procedures to ease applications, approvals, and claims, making the scheme more accessible to MSMEs.
• Sector-Specific Customization: Customize incentives and benchmarks for each industry to enhance efficiency and relevance.
• Encouraging Domestic Value Addition: Offer extra incentives for local sourcing to cut imports and strengthen domestic supply chains.
• Strengthening Aftercare and Support: Offer continuous support via technology, skill development, and market linkages to boost production, exports, and employment.

Conclusion

The PLI scheme is a crucial instrument in India’s industrial policy, aligning growth with global supply chains. However, its sustainability depends on transparent monitoring, innovation, and green manufacturing practices. If refined, it can make India a global leader in manufacturing.

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