The government will introduce the production-linked incentive (PLI) scheme for the toys and leather and footwear sectors, with a total outlay of over Rs 6,000 crore, according to the budget documents. Both schemes are set to run until 2031-32.

The PLI for toys will have an outlay of Rs 3,489 crore, while the footwear and leather sector will receive Rs 2,600 crore. These schemes are pending cabinet approval, with a token allocation provided for this year.

Several other sectors, including furniture, bicycles, chemicals and construction equipment, have also requested PLI schemes. However, there is no indication that the government has made any decisions regarding their demands.

Currently, PLI schemes for 14 sectors, with an outlay of Rs 1.97 trillion, are operational. Adding the two new sectors will increase the allocation for the scheme launched in 2020.

Of the total allocation, only 5% of the funds have been disbursed as incentives to beneficiaries. This financial year, the incentive outgo is expected to reach Rs 14,182 crore, up from Rs 8,000 crore in FY24. In FY23, the incentive payout under the scheme was Rs 2,900 crore.

The incentive payout is projected to increase in the coming years as production begins or ramps up in many units. By December 2023, around Rs 1.07 trillion had been invested by PLI companies, generating incremental sales of over Rs 9 trillion and creating 700,000 jobs.

The PLI scheme was first launched in March 2020 for three products — raw materials for the pharma industry, medical devices and large-scale electronics manufacturing. In November 2020, 10 more sectors were included, and in September 2021, PLI for drones was added to the list.