1. What is the Production Linked Incentive (PLI) scheme?
The PLI scheme is a government initiative launched in 2020 to attract investments and promote manufacturing and exports in specific sectors of the economy. It offers incentives based on incremental sales to be distributed over a period of five years.
2. Which sectors are currently covered under the PLI scheme?
The scheme initially covered 14 sunrise and strategic sectors, including auto and auto components, electronics and IT hardware, telecom, pharmaceuticals, solar modules, metals and mining, textiles and apparel, white goods, drones, and ACC batteries.
3. Why is the PLI scheme being expanded to new sectors?
To make fuller use of the allocated funds and drive more investments, the government is considering expanding the PLI scheme to new sectors such as toys, footwear, and leather. The aim is to incentivize manufacturing and boost economic growth in these labor-intensive areas.
4. What is the status of the proposed expansion?
The government is in the process of finalizing the expansion of the PLI scheme to toys, footwear, and leather. Cabinet notes for these sectors are at an advanced stage of preparation.
5. What is the proposed allocation for the new sectors?
The initial plan was to allocate around ₹3,500 crore for toys and approximately ₹2,600 crore for both footwear and leather sectors.
6. What is the rationale behind selecting toys, footwear, and leather for expansion?
Toys, footwear, and leather are chosen due to their labor-intensive nature and existing efforts to attract investments. Quality Control Orders (QCOs) have been introduced to ensure product standards and promote domestic production in these sectors.
7. How has the PLI scheme performed so far?
Certain sectors, such as large-scale electronics, pharmaceuticals, and food processing, have performed well under the PLI scheme. However, some sectors like high-efficiency solar PV modules, ACC batteries, textile products, and specialty steel have lagged behind.
8. How will the savings from under-subscribed sectors be utilized?
The government plans to utilize the savings from under-subscribed sectors to cover more areas under the PLI scheme and potentially restructure existing schemes that require adjustments.
9. What is the expected disbursal of incentives under the PLI scheme?
Incentives worth about ₹2,900 crore were disbursed in FY 2022-23. This amount is anticipated to rise significantly to approximately ₹13,000 crore in the current fiscal year.
10. What is the long-term vision behind the expansion of the PLI scheme?
The expansion aims to create a conducive environment for investment, stimulate manufacturing, reduce dependence on imports, and foster economic growth while ensuring quality standards and sustainable practices in the selected sectors.
