In line with its Atmanirbhar Bharat (self-reliant India) campaign, the Indian government has put manufacturing at the heart of its reform initiatives. It is expected to put manufacturing at the forefront in Budget 2021 as well. While the intent is there, industry experts believe more needs to be done, and the government needs to get the execution right.
Production linked incentive (PLI) schemes remain vital to boost manufacturing. A Credit Suisse report dated December 11 states that PLI schemes could contribute up to 1.7% to the gross domestic product (GDP) by FY27.
As the name signifies, incentives under PLI schemes are offered based on the production, not investment. This incentivizes manufacturing units to produce more to be eligible for higher incentives.
Source: Business Insider
