According to the Economic Survey tabled in the Parliament on 29th January, the Rs 1.46 trillion PLI Scheme is expected to make India an integral part of the global supply chain.

The PLI Scheme, also known as Production-Linked Incentive, is a scheme that aims to give companies incentives on incremental sales (over FY 2019-20) from products manufactured in domestic units.

This Scheme invites foreign companies to set up units in India. It also aims to encourage local companies to set up or expand their existing manufacturing units and ultimately aims at generating more employment and cutting down the country’s reliance on imports from other countries.

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Recently, this scheme was expanded to 10 sectors in India after gaining traction from global investors in the mobile manufacturing segment. Back on 1st April 2020, as part of the National Policy on Electronics, the IT Ministry notified a scheme that would give incentives of around 4-6% to electronics companies that manufacture mobile phones and other electronic components such as transistors, resistors, diodes, thyristors, capacitors, and nano-electronic components such as microelectromechanical systems.

According to the scheme, companies that make mobile phones that sold for RS 15,000 or more will receive an incentive of up to 6 percent on incremental sales of all such mobile phones made in India. This technique attracted foreign investment in the sector and encouraged domestic mobile phone makers to expand their units and presence in India.

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The Government also made 53 bulk drugs eligible for PLI worth Rs 6,940 crores and this lands us to conclude that the scheme is expected to benefit nearly 150 manufacturing units. It also has the potential to generate incremental sales of almost Rs 46,400 crores and additional employment over the next 8 years.

How will the PLI Scheme make India an integral part of the Global Supply Chain?
Talking about the present, in the economic survey, the government said that this scheme will make Indian manufacturers globally competitive, will attract investment in areas of core competency, and cutting-edge technology. Taking further notes, it added that the scheme will also help establish backward linkages with the MSME sector in the country which will further lead to more inclusive growth and will create huge employment opportunities.

– The automobile and its components sector was granted an incentive of Rs 57,042 crores.
– The mobile sector was granted an incentive of Rs 40,951 crores.
– The advanced cell chemistry battery sector was granted an incentive of Rs 18,100 crores.
– The electronic and technology products sector was granted an incentive of Rs 5,000 crores.
– The pharmaceutical drugs sector was granted an incentive of Rs 15,000 crores.
– The telecom and network products sector was granted an incentive of Rs 12,195 crores.
– The textile products sector was granted an incentive of Rs 10,683 crores.
– The food products sector was granted an incentive of Rs 10,900 crores.
– The high-efficiency solar PV modules sector was granted an incentive of Rs 18,100 crores.
– The white goods sector was granted an incentive of Rs 6,238 crores.
– The specialty steel sector was granted an incentive of Rs 6,322 crores.

Conclusion: The goal of the scheme was to boost manufacturing in the country and make it self-reliant. And in the process, it will also ensure efficiencies, create economies of scale, enhance exports, provide a conducive manufacturing ecosystem, and make India an integral part of the global supply chain.

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