NEW DELHI: The ₹1.97 lakh crore production-linked incentive (PLI) scheme, which was launched initially with three sectors in March 2020 and subsequently extended to 11 others, has so far attracted ₹53,500 crore of investment, generated 3 lakh jobs, and resulted in incremental output worth ₹5 lakh crore even as the government’s actual outgo in incentives has been less than ₹3,000 crore, an official said.
Speaking on the progress of the scheme, Rajeev Singh Thakur, additional secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) said, “PLI is given to encourage production, but companies are required to first invest in plant and machinery.” Therefore, the actual PLI outgo is less compared to investments, and the scheme will see its peak in the next two-three years when investments and production cycle reach the full potential, he added.
According to official data, against a total PLI claim of ₹3,420.05 crore by the participant companies, the government has disbursed ₹2,874.71 crore as on March 31, 2023. Electronic manufacturing topped the list of disbursals ( ₹1,649 crore) followed by pharmaceuticals ( ₹899 crore) and food products ( ₹700 crore). The first two also topped the list as they were launched in the first phase, a second official said, asking not to be named.
Thakur said the government approved 717 applications till December 2022 in the PLI sectors with expected investments of ₹2.74 lakh crore. So far, the PLI for electronics has attracted investments of over ₹5,100 crore and led to a total production of ₹2.4 lakh crore, generating employment for 52,000 people, he said. Similarly, the pharmaceutical sector saw investments of ₹19,000 crore, food processing, ₹6,000 crore and telecom, ₹1,600 crore.
Initially, the government announced PLI for three sectors in March 2020 — mobile manufacturing and specified electronic components (or large-scale electronics manufacturing) with a sanctioned outlay of about ₹40,950 crore; critical key starting materials/drug intermediaries and active pharmaceutical ingredients or APIs ( ₹6,940 crore); and manufacturing of medical devices ( ₹3,420 crore). While the first one was notified in April 2020, the other two were formally launched in July 2020.
The 11 other sectors were announced later, after Union finance minister Nirmala Sitharaman signalled the intent of encouraging domestic manufacturing through PLI in the Budget on February 1, 2021.
“For a $ 5 trillion economy, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains, possess core competence and cutting-edge technology. To achieve all of the above, PLI schemes to create manufacturing global champions for an AtmaNirbhar Bharat have been announced for 13 sectors. For this, the government has committed nearly ₹1.97 lakh crores, over 5 years starting FY 2021-22. This initiative will help bring scale and size in key sectors, create and nurture global champions and provide jobs to our youth,” she said in her Budget speech on February 1, 2021.
Of the 11, 10 were added shortly after that budget speech, advanced chemistry cell battery, IT hardware, automobiles and auto components, pharmaceuticals, telecom and networking products, technical textiles, food products, high-efficiency solar PV modules, white goods, and speciality steel. One more sector, drones and drone components, was added later in September 2021.