New Production-Related Incentives (PLI) schemes are set up to provide quiet burials, with many of the existing ones still producing satisfactory results. “The PLI spirit has been lost. PLI is no longer a positive child,” the official said on condition of anonymity.
Instead, the government outlines a new incentive scheme for industrial clutches. However, these incentives differ significantly from the PLI scheme in terms of structure and purpose, and focus on job creation and product quality, official sources say. The FY26 budget says new schemes will be rolled out for toys and leather/shoes, but cards like chemicals, bicycles, and transportation containers may have similar schemes.
The PLI policy was launched in 2021-22 to help Indian companies scale up and become large enough to compete globally. There are currently up to 14 schemes and the government is looking to provide Rs 1.95 by fiscal year 30 with an incentive of Rs 1.95. However, the progress of the scheme so far is not just a par on the course. There have been significant delays in investing in many sectors, including cars, pre-evolutionary cell batteries, special steel, and textiles that were supposed to lead the pack.
The company has invested more than Rs 1.5 Rs 3 Lakh krole from September 2024 under a PLI scheme of 14 for three years or under a Rs 3 Lakh krole of about 50% over five years.
However, only 6% of the incentive of Rs 1.95 Rs 1.95 Rs related to investments, sales/revenues and value-added, or 6% of the incentive of Rs 1.95 Rs 1.95 Rs have been paid until September 2024. Prior to the announcement of the budget, the cabinet notes had already been discussed about the new PLI in six sectors with a provisional allocation of Rs 18,000. These are 3,500 rupees for toys, 2,600 rupees for leather and footwear, 3,600 rupees for bicycles, 5,000 rupees for chemicals, 2,500 rupees for important inputs required for vaccines, and for shipping containers. It was 800 crore. All of these were to be funded from savings from existing PLI.
However, leaving PLI within the budget, the government announced that it will launch a “focus products” scheme to increase productivity, quality and competitiveness in the Indian shoe and leather sector.
This scheme is designed to support the design capabilities, component manufacturing and machinery required to produce non-leather quality footwear, in addition to leather footwear and products. It is expected to promote employment of 2.2 million people, generating sales of Rs 4,000 and exports of over Rs 1.1,000.
Based on the National Action Plan for Toys, the Budget also announced the implementation of a scheme to make India a global hub for toys. The scheme focuses on developing clusters, skills and manufacturing ecosystems that produce high quality, unique, innovative and sustainable toys representing the “manufacturing of India” brand.
While too many PLIs have diluted their objectives to support industries based on obstacles, this scheme has also not succeeded in the backward integration of micro, small and medium-sized enterprises (MSMEs) in manufacturing ecosystems. This will result in the government to announce national manufacturing missions in MSMES’ budgets to promote “Make in India” by providing policy support, implementation roadmap, governance and monitoring frameworks to central ministries and states. I was forced to do that.
