On the 10th anniversary of his government’s ‘Make in India’ initiative, Prime Minister Narendra Modi said that the Production Linked Incentive (PLI) schemes have been game-changers, enabling investments of thousands of crores and generating lakhs of jobs.
In a LinkedIn post, he lauded everyone who played a role in making the initiative a “roaring success”, saying each of them is a pioneer, visionary and innovator, whose tireless efforts have fuelled the programme’s success, making India the focus of global attention as well as curiosity.
“The Government of India is committed to encouraging ‘Make in India’ through all possible ways. India’s strides in reforms will also continue. Together, we will build an Atmanirbhar and Viksit Bharat!” the PM said.
What are PLI schemes?
The Production Linked Incentive (PLI) schemes initiative launched by the Narendra Modi-led NDA government in 2020 aimed at boosting domestic manufacturing and promoting specific sectors. The key objective is to incentivise companies to increase their production, thereby enhancing India’s competitiveness in the global market.
Union Finance Minister Nirmala Sitharaman had announced an allocation of Rs 1.97 lakh crores for the Production Linked Incentive (PLI) schemes across 14 key sectors. The initiative aims to create national manufacturing champions, generate 6 million new jobs, and add Rs 30 lakh crores in production over the next five years.
In addition to the three schemes launched in March 2020, the Government of India introduced 10 new PLI schemes in November 2020. The details are as follows:
March 2020:
-Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs) – Department of Pharmaceuticals
-Large Scale Electronics Manufacturing – Ministry of Electronics and Information Technology
-Manufacturing of Medical Devices – Department of Pharmaceuticals
November 2020:
-Electronic/Technology Products – Ministry of Electronics and Information Technology
-Pharmaceutical Drugs – Department of Pharmaceuticals
-Telecom & Networking Products – Department of Telecommunications
-Food Products – Ministry of Food Processing Industries
-White Goods (Air Conditioners & LEDs) – Department for Promotion of Industry and Internal Trade
-High-Efficiency Solar PV Modules – Ministry of New and Renewable Energy
-Automobiles & Auto Components – Department of Heavy Industry
-Advanced Chemistry Cell (ACC) Battery – Department of Heavy Industry
-Textile Products (MMF segment and technical textiles) – Ministry of Textiles
-Specialty Steel – Ministry of Steel
September 2021:
-Drones and Drone Components – Ministry of Civil Aviation
According to the government, 755 applications have been approved across 14 sectors. Investment of Rs 1.23 lakh crore have been realised till March 2024 resulting in employment generation of around 8 lakh, PIB data on July 30 shows.
What has been the Budget allocation for PLI schemes?
In her Union Budget 2024-25 presentation, Finance Minister Nirmala Sitharaman announced significant increases in allocations for Production Linked Incentive (PLI) schemes in sectors including automobiles, auto components, smartphones, laptops, IT hardware, and food processing. While no new PLI schemes were introduced, the budgetary hikes reflect the performance of existing programs. Better-performing schemes among the original 14 announced in 2020 received increased funding in the Budget for 2024-25.
In the Budget, a significant 37% increase was announced for the Production Linked Incentive (PLI) schemes under the Ministry of Electronics and Information Technology (MeitY), raising the budget from Rs 4,500 crores to Rs 6,200 crores. The PLI for mobile phones has successfully driven manufacturing and exports in this sector, and the ministry aims to replicate this model for laptops and semiconductors.
The allocation for the PLI scheme for automobiles and auto components has surged by 620% to Rs 3,500 crores in the Budget Estimate (BE) for 2024-25, compared to Rs 484 crores in the Revised Estimate (RE) for 2023-24.
Meanwhile, the budget for Research and Development (R&D) in the IT and electronics sector has been increased from Rs 1,000 crores to Rs 1,148 crores.
Status of PLI scheme as of June 30, 2024
Minister of State for Electronics and Information Technology Jitin Prasada in a written reply to a question in the Lok Sabha in July said that as of June 30, 2024, a total of 32 companies have been approved under the Production Linked Incentive (PLI) scheme for Large Scale Electronics Manufacturing, which includes 7 Greenfield companies and 25 Brownfield companies. The cumulative investment under this scheme has reached Rs 8,282 crores, with Greenfield companies contributing Rs 3,136 crores and Brownfield companies accounting for Rs 5,146 crores.
Meanwhile, a total of 27 companies have been approved under PLI Scheme 2.0 for IT Hardware, comprising 6 Greenfield and 21 Brownfield companies. The total investment in both the original and Scheme 2.0 for IT Hardware stands at Rs 464.66 crores, with Brownfield companies investing Rs 386.09 crores and Greenfield companies contributing Rs 78.57 crores.