PLI schemes: Investment seen at over Rs 1.03 lakh crore, but Rs 4,415 crore disbursed so far

PLI schemes: Investment seen at over Rs 1.03 lakh crore, but Rs 4,415 crore disbursed so far

India's Production Linked Incentive (PLI) schemes have witnessed investments of over Rs 1.03 lakh crore until November 2023, however, the disbursals under the scheme stood Rs 4,415 crore across eight sectors, including large-scale electronics manufacturing, IT hardware, bulk drugs, food processing, and drones.

The overall investment witnessed has resulted in a production or sales value of Rs 8.61 lakh crore and the creation of 6.78 lakh direct or indirect jobs so far since the inception of the PLI programme, as per a statement by the Ministry of Commerce on January 17.

Significant contributions from PLI Scheme sectors such as large-scale electronics manufacturing, pharmaceuticals, food processing, and telecom and networking have led to exports surpassing Rs 3.20 lakh crore, according to the statement. The PLI scheme, announced in the Union Budget for 2021-22 with an outlay of Rs 1.97 lakh crore, currently covers 14 key sectors, ranging from electronic products to drones.

While the flagship scheme has been successful in sectors like electronic manufacturing, investments have been slow in others. The commerce ministry is working on a review to enhance utilisation across sectors. As of the statement date, 746 applications have been approved in the 14 sectors under the PLI Scheme, with an expected investment of over Rs 3 lakh crore.

The statement notes that 176 micro, small, and medium-sized enterprises (MSMEs) are among the PLI beneficiaries in sectors such as bulk drugs, medical devices, pharma, telecom, white goods, food processing, textiles, and drones.

Various electronic components, such as batteries, chargers, and camera modules, have been localized in the country. The statement highlights positive developments in the component ecosystem, with large companies like TATAs entering into component manufacturing.

Although PLI beneficiaries in large-scale electronics manufacturing represent only 20 percent of the market share, they contributed to 82 percent of mobile phone exports during 2022-23. Mobile phone production increased by over 125 percent, and exports increased four-fold from 2020-21. Foreign Direct Investment (FDI) in this sector increased by 254 percent since the inception of the PLI scheme.

The ministry emphasises that due to the PLI Scheme, there has been a significant reduction in imports of raw materials in the pharma sector. Import substitution of 60 percent has been achieved in the telecom sector, and the Food Processing sector has experienced a substantial increase in sourcing raw materials from India, positively impacting the income of Indian farmers and MSMEs.

On December 4, Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), stated that the focus is on improving the utilisation of existing areas under the PLI plan before expanding it. Additionally, the government is not currently considering an extension of the scheme to Toys.