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13th June 2024 (13 Topics)

PLI Scheme


The PLI scheme is expected to attract investments of Rs 3-4 lakh crore in the next four years and generate 2 lakh jobs as large projects in sectors, including semiconductor and pharmaceutical intermediaries, are expected to take off.

What is the role of PLI Scheme in Indian Economy?

  • Production Linked Incentive scheme (PLI) has become a crucial part of the vision of making India a $ 5 trillion economy. In the post-pandemic scenario, PLI is proving to be a huge catalyst in creating ‘AatmaNirbhar Bharat’.
  • The scheme currently targets 14 sectors of strategic and economic importance for India’s economic growth.
  • The 14 sectors are: (i) Mobile Manufacturing and Specified Electronic Components, (ii) Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients, (iii) Manufacturing of Medical Devices (iv) Automobiles and Auto Components, (v) Pharmaceuticals Drugs, (vi) Specialty Steel, (vii) Telecom & Networking Products, (viii) Electronic/Technology Products, (ix) White Goods (ACs and LEDs), (x) Food Products, (xi) Textile Products: MMF segment and technical textiles, (xii) High efficiency solar PV modules, (xiii) Advanced Chemistry Cell (ACC) Battery, and (xiv) Drones and Drone Components.
  • The purpose of the PLI Schemes is to
    • attract investments in key sectors and cutting-edge technology
    • ensure efficiency and bring economies of size and scale in the manufacturing sector
    • make Indian companies and manufacturers globally competitive
  • These schemes have the potential of significantly boosting production, employment and economic growth over the next five years or so.

Significance of PLI Scheme for Economy:

It aims to enhance the country's manufacturing capacity, offering various benefits.

  • Stimulating Economic Growth: It provides financial incentives to manufacturers, encouraging both domestic and foreign investment in critical sectors. This injection of funds is geared towards fostering economic growth and industrial development.
  • Reduced Reliance on Imports: The scheme aims to reduce India's dependence on imported goods. It results in a more balanced trade deficit and a stronger Indian rupee.
  • Promoting Export Competitiveness: Another objective of the scheme is to boost export competitiveness. By incentivizing production for export-oriented industries, it aims to elevate India's position in global trade and reduce reliance on imports.
  • Job Creation: Increased local manufacturing under the PLI scheme is anticipated to generate significant employment opportunities. It is estimated to create around 60 lakh new jobs over the next five years, thus contributing to the country's socio-economic development.


Q. Consider, the following statements : (2023)

Statement-I : India accounts for 3.2% of global export of goods.

Statement-II : Many local companies and some foreign companies operating in India have taken advantage of India's ‘Production-linked Incentive’ scheme.

Which one of the following is correct in respect of the above statements?

  1. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
  2. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
  3. Statement-I is correct but Statement-II is incorrect
  4. Statement-I is incorrect but Statement-II is correct

Solution: (d)

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