Hopes from the Budget : Increase in PLI Allocation
There is strong anticipation in the budgetary announcement to assist these industries under the Production Linked Incentive (PLI) scheme aimed at boosting production of electronics and drones. Commerce Minister Piyush Goyal has emphasized that the PLI scheme is a kickstarter to enhance the production of drones and their components, urging that it should not be seen as a permanent subsidy from the government.
A provision of Rs. 44,000 crores under the PLI scheme in the budget from 2024 to 2030 can be made to enhance the manufacturing capacity of electronics and semiconductors. This includes Rs. 15,000 crores for electronic products, Rs. 11,000 crores for semiconductor products, and Rs. 18,000 crores for initiatives such as talent development, foundational infrastructure, and technology adoption. The electronics industry faces a large import deficit from China, necessitating policy decisions to encourage joint initiatives in this sector, otherwise, this initiative could fail.
The PLI scheme was launched in 2020 to increase domestic manufacturing capacity, with the primary objective of replacing imports and creating employment. Initially tested in three industries, it has since expanded to include 11 more sectors. These sectors encompass mobile manufacturing, medical devices, automobile and auto components, pharmaceuticals, drugs, special steel, telecommunications and internet banking products, electronic products, white goods (ACs and LEDs), food products, textile manufacturing, solar PV modules, advanced chemical cells (ACC) batteries, and drones and drone components. The Modi government had pledged to spend Rs. 1.97 lakh crore for this ambitious scheme in 2020-21. The government hopes to create 60 lakh new jobs and achieve additional production worth Rs. 30 lakh crore in five years through this scheme.
