The Production Linked Incentive (PLI) launched by the Modi government to amplify the local manufacturing may add USD 520 billion to gross domestic product (GDP) in the coming five years.
“The PLI scheme may add around $520 billion to the GDP in the next five years,” domestic brokerage Sharekhan by PNB Paribas said in a report.
The Modi government initiated the PLI to reduce India’s dependence on imports and inviting global capital-intensive companies to set their manufacturing units in India.
The scheme will benefit 10 selective sectors that are labour-intensive. With an estimated budget of Rs 2 lakh crore, the government is focusing on these sectors to cater to the growing employment needs in the country.
The 10 sectors that will get the incentives include
· Advance Chemistry Cell (ACC) battery( Rs 18,100 crore)
· electronics and technology products (Rs 5,000 crore);
· automobiles and auto components (Rs 57,042 crore);
· pharmaceuticals and drugs (Rs 15,000 crore);
· telecom and networking products (Rs 12,195 crore);
· textiles products (Rs 10,683 crore);
· food products (Rs 10,900 crore);
· high-efficiency solar PV modules (Rs 4,500 crore);
· white goods (Rs 6,238 crore)
· specialty steel (Rs 6,322 crore)
The scheme envisages providing on average 5 percent of the production value as an incentive. This implies that minimum production as a result of the scheme stands to be around USD 520 billion over the next five years, says the report. According to analysts, electronics, particularly mobile phone manufacturers, stand to be the biggest beneficiary of the scheme.