Production Linked Incentive Scheme

Why in news?

• The Central government approved production-linked incentive (PLI) for the textile sector with a budgetary outlay of Rs.10,683 crore.

What is PLI Scheme?

• The scheme aims to give companies incentives on incremental sales from products manufactured in domestic units.
• It is an outcome- and output-oriented scheme where incentives will be paid only if the manufacturers make the goods.
• The amount of the incentive would decrease as the years go by.
• This scheme will give cash incentives for five to seven years and all the sunrise and important sectors are proposed to be covered in this.
• Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s Manufacturing Capabilities and Exports, an outlay of INR 1.97 lakh crore has been announced in Union Budget 2021-22 for PLI schemes for 13 key sectors for a period of 5 years starting from fiscal year (FY) 2021- 22.
• These 13 sectors includes already existing 3 sectors named
  • (i) Mobile Manufacturing and Specified Electronic Components
  • (ii) Critical Key Starting materials/Drug Intermediaries & Active Pharmaceutical Ingredients
  • (iii) Manufacturing of Medical Devices
• 10 new key sectors have been approved by the Union Cabinet recently in November 2020. These 10 key sectors are:
  • (i) Automobiles and Auto Components, (ii) Pharmaceuticals Drugs, (iii) Specialty Steel, (iv) Telecom & Networking Products, (v) Electronic/Technology Products, (vi) White Goods (ACs and LEDs), (vii) Food Products, (viii) Textile Products: MMF segment and technical textiles, (ix) High efficiency solar PV modules, and (x) Advanced Chemistry Cell (ACC) Battery.
• The PLI schemes will be implemented by the concerned Ministries/ Departments and will be within the overall financial limits prescribed.

Significance of PLI Scheme:

• The scheme boost domestic manufacturing and cut down on import bills >> as the central government give companies incentives on incremental sales from products manufactured in domestic units.
• Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
• These sectors are labour intensive and are likely, and the hope is that they would create new jobs for the ballooning employable workforce of India.

PRACTICE QUESTION

Which of the following sectors are covered under ‘Production Linked Incentive Scheme’?

1. Automobiles.

2. Pharmaceuticals Drugs

3. Textile Products

Select the correct answer using the code given below:

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

              D

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