NEW DELHI: The pressure to expand the production-linked incentive (PLI) scheme to more sectors has been mounting, but the Prime Minister’s office (PMO) and the finance ministry have been resisting it, government sources told this newspaper.
According to sources, several ministries have been pushing for PLI schemes for their respective sectors, many of which are already doing well without the support of the scheme. “We must compliment the PMO and other top levels of the government for keeping such pressures at bay. The general attitude among many ministries has been that their ‘constituents’ should also get the benefit of the PLI scheme whether they need it or not,” said a government official.
The government has allocated Rs 1.97 lakh crore for the PLI schemes in 14 sectors. It has disbursed incentives to manufacturers in eight sectors, and the focus is now on six remaining sectors where the scheme has been slow to pick up. There were talks of expanding the PLI to three more sectors – new-age e-bikes, toys and footwear. However, the official mentioned above said that it is unlikely that the government would agree to a PLI scheme for toy manufacturers.
“Toy manufacturers asking for PLI does not make sense as the country is already a net exporter of toys,” he said. In 2022-23, India exported toys worth $521 million compared to imports worth $421 million. The official said that ministries must understand that it is not easy money. “The amount of Rs 1.97 lakh crore is more than three years of MNREGS allocation. You cannot expect only cash incentives to boost manufacturing in the country,” he added.
Meanwhile, the official told this newspaper that the government has no plans to make changes in the PLI scheme for now. The focus, he said, is on effectively implementing the schemes in the 14 identified sectors. Under the PLI scheme, a cash incentive of 4-6% is given to eligible companies on incremental sales of goods manufactured in India. The scheme is for a period of five years.