PLI Registration
The PLI Scheme was launched as a part of the National Policy on Electronics 2019 to give incentives of 4-6% to electronic companies. Especially for the company’s manufacturing electronic components like mobile phones, diodes, transistors, etc.
1. The major aim of the scheme was to invite foreign investors to set up their manufacturing units in India. Similarly, the PLI scheme aims to promote the local manufacturers to expand their manufacturing.
2. Features: Under the Scheme, companies will get incentives on incremental sales from products manufactured in domestic units.
3. Implementation: The scheme is implemented by the concerned ministries / departments.
Initially, the Scheme focused on three sectors.
SI. No. | PLI Scheme | Concerned Ministry / Department |
1. | Mobile Manufacturing and Specified Electronic Components | Ministry of Electronics and Information Technology (MeiTY). |
2. | Critical Drug Intermediaries, Active Pharmaceutical Ingredients | Department of Pharmaceuticals |
3. | Manufacturing of Medical Devices | Department of Pharmaceuticals |
Expansion of the PLI Scheme to other sectors:
SI. No. | Notified PLI Scheme | Concerned Ministry / Department |
1. | Electronic/Technology Products | Ministry of Electronics and Information Technology |
2. | Pharmaceutical drugs | Department of Pharmaceuticals |
3. | Telecom & Networking Products | Department of Telecom |
4. | Food Products | Ministry of Food Processing Industries. |
5. | White Goods (ACs & LED) | Department for Promotion of Industry and Internal Trade. |
6. | High-Efficiency Solar PV Modules | Ministry of New and Renewable Energy |
SI. No. | Other PLI Scheme | Concerned Ministry / Department |
1. | Automobiles & Auto Components | Department of Heavy Industries |
2. | Advance Chemistry Cell (ACC) Battery | NITI Aayog and Department of Heavy Industries. |
3. | Textile Products (MMF segment and technical textiles) | Ministry of Textiles |
4. | Speciality Steel | Ministry of Steel |
Expansion of the PLI Scheme to other sectors:
The government expanded the PLI Scheme for fulfilling various needs in the manufacturing sector. Such as,
1. The PLI Scheme provides enough support to Sunrise industries at their initial stage.
Sunrise Industry: These are relatively new industries but growing fast at present. Further, these are expected to become important in the future. For Example, Solar energy industries, Food Processing Industries, etc.
2. Further, India despite dominating the services sector, contributes very little to the global supply chain. PLI scheme can help India to build an export base.
For example, According to the Parliamentary report, the minimum production in India due to PLI Schemes is expected to be over US$ 500 billion in 5 years.
3. At present, there is a growing demand for diversification of supply chains. Especially to avoid the dominance of China. The PLI Scheme by increasing production can reduce Chinese demands.
4. Attract the global investment to India after the Covid-19 pandemic. India is a consumer-based economy. By providing incentives, the PLI scheme attracts more foreign investment to India.
Advantages of PLI Schemes
The Scheme provides various advantages to the Indian Manufacturing sector.
1. Firstly, Expansion of the present capacity: The PLI Scheme augments the present achievements of India. For example,
Indian Textile Industry is one of the largest in the world.
India is the second-largest producer of steel.
Introducing the PLI Scheme in these sectors will further expand these sectors.
2. Secondly, India is expected to have a USD 1 trillion digital economy by 2025. The projects like Smart City Mission and Digital India require huge investments. India at present importing the equipment and raw materials. On the other hand, the PLI Scheme will provide low-cost indigenous products. So the cost associated with other projects will also come down.
3. Thirdly, the government cannot make sustained investments in capital-intensive sectors. Because they have a longer gestation period. But the PLI Scheme based on incremental output is more effective than the other grant-based input subsidy schemes like Mega Food Parks, etc. This will reduce the Government expenditure.
4. Fourthly, Generate employment opportunities: The sectors such as textile, steel are labor-intensive in nature. By increasing manufacturing in these sectors, India can reduce the unemployment ratio and also create skilled manpower.
5. Fifthly, Encouraging local manufacturing units: The scheme aims to develop local industries. Further, the scheme also facilitates innovation and research, development and up-gradation of technology of Indian firms. Thus, the local manufacturing units can become globally competitive in the long run.