NEW DELHI: Before expanding the production-linked incentive scheme (PLI), which promises to bring a whole host of benefits for various industries across sectors, the government needs to evaluate its merits and demerits with all data about its performance, former Reserve Bank of India Governor Raghuram Rajan said on Monday.
According to him, not enough quality jobs have been created in the country due to this much-touted scheme to boost local manufacturing. “The public deserves more information and a more informed debate when lakhs of crores of public money are at stake. If it is not going to create crores of jobs, India needs (thus far, the scheme has created 3% of the anticipated additional employment of 0.6 crores, while 15% of anticipated investment has already come in), the sooner we shift to schemes that will work, the better,” Rajan said. As per Rajan, more data about its performance is needed, at least in the industries where the scheme has run for some time.
“For proper assessment, the government has to make more data available… But without more analysis, we can’t reject the possibility that this is an enormous and possibly misdirected transfer of public resources to large domestic and foreign firms. “PLIs to industries where large industrialists were anyway going to make investments is a pure freebie to them. That they invest and produce cannot be seen as a “success”.
“This is why the process by which the government decides which industries are to be favored has to be transparent, and open to questioning by the interested public. It is not,” he added. “As PLI schemes depend upon exports, the present global situation isn’t conducive for the manufacturing companies to comply with the parameters set in the schemes to avail incentives,” Pronab Sen, economist and former chief statistical officer of India, told this newspaper.
‘More data about PLI scheme performance needed’
According to Rajan, not enough quality jobs have been created in the country due to this much-touted scheme to boost local manufacturing. As per Rajan, more data about its performance is needed, at least in the industries where the scheme has run for some time