6 years on, PLI schemes see 18.5% of total outlay, Pg17

Key Highlights:

• A report by NITI Aayog and IIM Ahmedabad revealed that Production-Linked Incentive (PLI) schemes disbursed 18.5% of their total outlay by March 2026.
• The cumulative outlay for the 14 PLI schemes is Rs 1.91 lakh crore.
• The schemes have attracted investments of Rs 2.40 lakh crore, generated production worth Rs 22.66 lakh crore, and created over 8.49 lakh jobs.
• Schemes for drones, large-scale electronics, and food products showed higher disbursement rates, ranging from 25% to 77%.
• Nine schemes, including bulk drug, automobile, and textile, saw disbursements of less than 10% of their respective outlays.

PLI Scheme Performance.jpg

Detailed Insights:

• The assessment covers 14 Production-Linked Incentive (PLI) schemes across key sectors such as pharmaceuticals, textiles, automobile, and steel.
• The modest share of cumulative disbursement is consistent with the performance-linked design, where incentives are released upon achieving specific investment and production criteria.
• The report indicates that nearly 70% of targeted segments are broadly on track, with particularly strong outcomes seen in electronics, telecom, and pharmaceuticals.
• The assessment suggests a need for reforms, shifting focus from initial success to strengthening the long-term effectiveness of the schemes.
• Criticisms include a sharp surge in imports and manufacturing largely due to assembly in some sectors like electronics, which may not significantly add to employment.
• The report emphasizes refining the PLI schemes to address these challenges and enhance their overall impact, rather than just continuing them.

Key Concepts Involved:

• Production-Linked Incentive (PLI) Scheme: A government initiative offering incentives to companies for incremental sales from products manufactured in India.
• NITI Aayog: A policy think tank of the Government of India, providing directional and policy inputs.
• Gestation Period: The time taken for a project or scheme to become productive or yield significant results.