- According to analysts, electronics, particularly mobile phone manufacturers, stand to be the biggest beneficiary of the scheme
- In March, the government announced the PLI scheme to help lower the country’s dependence on imports, mainly from China
The production-linked incentive (PLI) scheme launched to boost local manufacturing may add $520 billion to the gross domestic product in the next five years, as per a report. According to analysts, electronics, particularly mobile phone manufacturers, stand to be the biggest beneficiary of the scheme. Other sectors that will benefit include automobile, battery, pharma, food, textiles, and telecom
In March, the government announced the PLI scheme to help lower the country’s dependence on imports, mainly from China. It did this to incentivise and inviting global as well as capital-rich companies to set up manufacturing capacities in the country. Domestic brokerage Sharekhan by PNB Paribas said in a note said that the PLI scheme may add around $520 billion to the GDP in the next five years.
Budgetary outlay of Rs 1.96 lakh crore
The scheme is applicable for 10 select sectors, which are labour-intensive and expected to provide to the growing employment needs and achieving size and scale in manufacturing. As part of the scheme, the government has made a budgetary outlay of Rs 1.96 lakh crore or $ 26 billion.
The scheme aims to provide on average five per cent of the production value as an incentive. This implies that minimum production as a result of the scheme stands to be around $520 billion over the next five years as per the report. If taken off as planned, the scheme could boost exports. This will narrow the trade deficit by $ 55 billion.
