Budget 2024: Will FM Sitharaman expand PLI scheme to other sectors or give it a miss?

Interim Budget: Though Finance Minister Nirmala Sitharaman has already made it clear that there won't be any “spectacular announcement” this time, as usual, expectations are running high ahead of the interim budget. From big conglomerates to the common man, everyone is keenly looking forward to Finance Minister Nirmala Sitharaman’s budget speech, slated to be delivered on February 1.

The Modi government is known for springing surprises; thus, there could be some announcements on the PLI scheme front. This much-touted production-linked incentive (PLI) scheme was launched in the aftermath of the COVID-19 pandemic to give a big push to domestic manufacturing and to make it globally competitive in the long run. However, the primary goal of this program is to generate jobs, which India sorely needs. The government has stated that the PLI scheme could be extended to more sectors, and what would be a more opportune moment than the budget speech to announce that?

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The Centre made its intention clear at the very start of the New Year, as it extended the Production-Linked Incentive (PLI) Scheme for Automobile and Auto Components by a year by making a few amendments. These amendments aim to provide clarity and flexibility to the scheme. The incentive will now be applicable for five consecutive financial years, starting from fiscal 2023-24.

As far as the performance of these schemes is concerned, there are some heartening numbers. The production-linked incentive (PLI) schemes for 14 sectors have attracted over Rs 95,000 crore in investment till September last year, according to the Commerce and Industry Ministry. Moreover, as many as 746 applications have been approved until November 2023 under these schemes.
The sectors that come under the PLI scheme include electronics, telecommunication, pharma, white goods (AC and LED light components), and textiles.



"746 applications have been approved till November 2023. PLI units are established in more than 150 districts (24 states). Over Rs 95,000 crore of investment reported till September, which has led to production/sales of Rs 7.80 lakh crore and employment generation (direct & indirect) of over 6.4 lakh," the ministry said. It added that incentives worth around Rs 2,900 crore have been disbursed in 2022-23.

The PLI schemes have been successful in achieving desired outcomes such as localisation of medical technologies, bulk drugs, electronics, and specialty steel, among others, top government officials said last month.

Interestingly, many were expecting Sitharman to include more sectors under PLI in Budget 2023, but that didn't happen. But that could happen this time. In the 2019 interim budget, ahead of the polls that year, the Modi government threw up another surprise by announcing tax sops for India's lower and middle classes by raising the tax exemption limit from Rs 2,50,000 per annum to Rs 5,00,000 per annum.

"PLI scheme is showing significant dividends across many sectors. The intention is to also roll out this PLI scheme for more labour-intensive sectors such as toys, leather and footwear and other such sectors where employment benefits will be more significant," Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh had said earlier.