On Friday, the Parliamentary Standing Committee on Commerce recommended that the government extend the duration and scope of the ongoing Production Linked Incentive (PLI) scheme, aiming to enhance its effectiveness. The committee highlighted the need to address “administrative delays” and reduce “compliance burdens” in order to improve the scheme’s overall performance.
In its report, the committee proposed expanding the PLI scheme to include more sectors with high employment potential, such as chemicals, leather, apparel, toys, jewellery, and handicrafts. The panel also stressed the importance of supporting value-added garment production in the man-made fibre (MMF) segment, urging the government to engage with Export Promotion Councils and stakeholders to revise the scheme, including covering additional high-potential MMF apparel products and relaxing the value addition criteria.
The committee also focused on the pharmaceutical sector, which plays a crucial role in India’s foreign trade. It pointed out that while the pharmaceutical industry has been a key contributor to export growth, challenges such as price fluctuations in international markets need to be addressed. The report suggests that the PLI scheme should be adjusted in consultation with stakeholders to mitigate these challenges.
As of December 2023, the PLI scheme has attracted an actual investment of Rs 1.07 lakh crore, leading to production worth Rs 8.70 lakh crore and the creation of about 7 lakh jobs. Exports have surpassed Rs 3.40 lakh crore, with notable contributions from sectors like electronics, pharmaceuticals, and food processing.
Despite these positive outcomes, Reuters reported on Friday that the government has decided to let the PLI scheme expire. According to officials, the scheme will not be expanded beyond the 14 pilot sectors, and production deadlines will not be extended, even though some firms had requested extensions. However, the report clarified that the conclusion of the PLI scheme does not signal an end to the government’s manufacturing goals, as alternative strategies are being planned.
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