The Government of India delays new PLI schemes until it verifies the success of the existing ones

The Government of India has decided to delay the introduction of production-linked initiatives (PLI) for additional sectors until the existing initiatives produce positive results.

Some high-ranking officials have received mixed reviews of the scheme and have also received some valuable insights for the Prime Minister and the Economic Advisory Council.

Some close sources have revealed that the government is not planning any new PLI schemes for the time being. Top officials believe that they should wait and see how the existing schemes perform, as they have not yet met the government's expectations. Only a few of the 14 schemes are doing well.

The PLI scheme was first launched three years ago with an initial allocation of Rs.1.97 trillion. The aim of the scheme was to boost domestic manufacturing and attract investments.

Some sectors, such as mobile manufacturing, pharmaceutical drugs, bulk drugs, medical devices, and food products, have responded positively to the scheme. Also, the incentives or subsidy payouts have been the highest in these sectors.

However, some sectors, such as solar PV modules, steel, textiles, and automobiles, have not shown promising results, and their progress has been slower than anticipated. The center is currently exploring any room for improvement in any of these schemes.

There are several government departments that have proposed new PLI schemes but are pending approval from the Cabinet.

The Department for Promotion of Industry and Internal Trade made a proposal for one such scheme. They had finalized two schemes worth over Rs.7,000 crore for toys and bicycle components towards the end of the last financial year. This proposition has not been approved by the Cabinet.

Similarly, new schemes for shipping containers, chemicals, petrochemicals, leather, and some other products have been demanded. There was an expectation that at least half a dozen new PLI schemes would be announced by the finance minister in the Union Budget in February. But no such new PLI scheme was announced.

Thankfully, in the event of any future scheme announcements, no extra funds will be required, as the initial schemes already possess savings of up to Rs.11,848 crore that can be utilized.