Rs 4,415 Crore Disbursed by Government under PLI Scheme; Job Creation Remains a Challenge

Disbursement Overview

The Indian government has effectively disbursed Rs 4,415 crore under the Production-Linked Incentive (PLI) scheme, covering eight key sectors including electronics, pharmaceuticals, IT hardware, bulk drugs, medical devices, telecommunications, food processing, and drones. The fiscal year 2024 witnessed a disbursement of Rs 1,515 crore till October, following Rs 2,900 crore in the fiscal year 2023, marking the commencement of the payments under this scheme.

Scheme Inception and Implementation

Launched in 2021, the PLI schemes were initiated across 14 sectors, with a budgetary allocation of Rs 1.97 lakh crore. The objective was to boost telecommunication, white goods, textiles, medical devices, automobiles, speciality steel, high-efficiency solar PV modules, advanced chemistry cell battery, drones, and pharmaceuticals. The responsibility of disbursing the incentives falls on the respective departments and Project Monitoring Agencies (PMAs), which are also tasked with scrutinizing the claim applications and ensuring efficient processing.

Investment and Production Impact

The scheme has led to substantial investments, with over Rs 1.03 lakh crore reported till November 2023. This investment has contributed to production and sales amounting to Rs 8.61 lakh crore and has generated employment for over 6.78 lakh people, both directly and indirectly. Additionally, the scheme has propelled exports, surpassing Rs 3.20 lakh crore, with significant contributions from the electronics, pharmaceuticals, food processing, and telecom sectors.

Sector-specific Achievements

• In the Pharma sector, there has been a notable decrease in raw material imports, with the commencement of production of 39 medical devices including CT-Scans and MRI machines.
• The Telecom sector achieved a 60% import substitution, and sales of telecom and networking products by PLI beneficiaries increased by 370% compared to the base year of FY 2019-20.
• The Food Processing sector saw an increase in sourcing of raw materials from India, positively impacting the income of Indian farmers and MSMEs.
• In Electronics, there has been a 125% increase in mobile phone production, with a 254% increase in Foreign Direct Investment (FDI) since the inception of the PLI scheme for Large-Scale Electronics Manufacturing (LSEM).

Challenges in Job Creation

Despite these achievements, job creation in proportion to the investments remains a challenge. Technology-driven production lines often require limited manpower, and with the advent of Industry 4.0, this challenge might intensify. While over 6.78 lakh jobs have been created, there is a concern about the nature and number of these jobs, given the high-tech orientation of the industries involved.

Future Prospects

The government is optimistic about achieving the disbursement target of Rs 11,000 crore by the end of this fiscal year. The focus remains on making Indian companies globally competitive by attracting investments in key sectors an