New PLi after the verification of existing intiatives

The government has decided to hold off introducing the production-linked incentive (PLI) scheme for additional sectors until it verifies the efficacy of existing initiatives.

Top government officials have received mixed feedback on the scheme, including insights from the Economic Advisory Council to the Prime Minister.

Top government officials believe that there is a need to wait and watch, since the kind of performance they were expecting from the scheme is yet to happen. Of the 14 schemes, only a handful are performing well.

Launched three years ago with an allocation of ₹1.97 trillion, the scheme aimed to boost domestic manufacturing and draw investments. Substantial progress has been seen only in sectors such as mobile manufacturing, pharmaceutical drugs, bulk drugs, medical devices, and food products, where incentives or subsidy payouts have been the highest.

However, sectors like solar PV modules, steel, textiles, and automobiles haven’t shown promising results, with progress slower than anticipated. The Centre is currently exploring whether there is a need for any course correction in any of these schemes.

Although several government departments have proposed new PLI schemes. But they have not yet received permission from the central cabinet. For example, the Department for Promotion of Industry and Internal Trade (DPIIT) had approved two schemes worth 7,000 crore rupees for toys and bicycle components at the end of the last fiscal year. A cabinet proposal was issued for these, but it has not been approved yet.

A request has been made to start a new PLI scheme for shipping containers, chemicals and petrochemicals, leather, and some other products.

In any case, starting new schemes may not require a new amount. It is estimated that around 11,848 crore rupees can be saved in the first phase of PLI, which can be utilized.