PLI'S LONG MARCH

The production-linked incentive scheme has faced major challenges. But it has come out unscathed and is changing India's manufacturing space for the better

- ARNAB DUTTA

APRIL IS A cruel month. It was, perhaps, at its cruellest in 2020 when the country went under a national lockdown, and the Covid-19 pandemic swept over the Indian hinterlands like a storm. But even as this was going on, the Indian government came up with a scheme that contained within it the kernel that could potentially transform the country into a global manufacturing hub. Called Production Linked Incentive, or PLI, the scheme since its inception has navigated itself through some choppy waters—from regulatory hurdles to coordinating stakeholders across numerous sectors. But one glance through the complexity of the scheme, which involved seamless collaboration among multiple ministries, government departments, private enterprises, local authorities, and state governments, and it is not surprising that it encountered roadblocks. What is remarkable is that despite these challenges, the scheme has proved to be resilient and nearly three and a half years after the initial approval of proposals in October 2020, the scheme has emerged as a significant reason behind the growth of India’s manufacturing sector.

Consider the mobile handsets industry, where the PLI scheme played a pivotal role. This sector has now emerged as a significant beneficiary, and the numbers speak for themselves. Since its inception, the value of locally-produced mobile handsets has seen a remarkable rise, soaring from ₹2.2 lakh crore in FY21 to an impressive ₹3.5 lakh crore in FY23. Meanwhile, exports from India have witnessed a fourfold increase, surging from ₹22,868 crore in FY21 to a substantial ₹90,000 crore in FY23.