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Crucial sectors of manufacturing in the country expected to trigger industrial activity in the country and take India on the path of a global manufacturing hub are showing signs of slowing down in about a year since Production-Linked Incentive scheme was launched, the Business Standard has reported.
An inter-ministerial panel which has drawn up a report after reviewing the growth in investment has noted “significantly slow” investment flowing into textiles, speciality steel and IT hardware in FY24. This panel reviews the performance of the different sectors periodically.
The panel includes representatives from the respective ministries/departments, DPIIT (Department for Promotion of Industry and Internal Trade) and the think tank NITI Aayog.
The figures also show the extent of slowing down. While the government expected about Rs 49,682 crore to materialise in FY24, the amount in the first three quarters has amounted to Rs 30,695, or 61.8% in 14 sectors of manufacturing such as medical devices, white goods, automobile and auto components and ACC batteries.
The sectors where the PLI scheme has been successful in attracting investments include mobile phones, telecom, drones, bulk drugs, pharmaceuticals, and food processing. These could not only meet the targets set by the administration but also exceed them.
“The progress of PLI Schemes of IT Hardware, Textile Products and Specialty Steel is significantly slow in terms of investments (in FY24),” read the minutes of the meeting according to the newspaper.
In earlier years, though investment exceeded the government’s estimate, performance of different sectors was not the same. Till FY23, the PLI schemes cumulatively attracted an investment of Rs 75,917 crore against a target of Rs 60,345 crore. The production that all these investments have generated stood at Rs 5.96 trillion and created 3.67 lakh direct employment. Both these exceeded the investment target of Rs 5.78 trillion and employment target of 2.54 lakh.
“Under PLI scheme for bulk drugs and medical devices, while the target of investment has been met, actual production/sale has been below target. Under the PLI Scheme for automobile and auto components, production/sales target was achieved but the target of investment was not achieved,” read the minutes of the meeting.
Speaking in aggregate terms, the PLI scheme has attracted investments of Rs 1.03 trillion so far. The exports the scheme has generated exceed Rs 3.20 trillion since the scheme was launched.
The investment has led to products worth Rs 8.61 trillion so far and employment (direct and indirect) of more than 6.78 lakh, revealed DPIIT data.
The PLI scheme is designed to turn the country into a manufacturing superpower, reduce cheap imports and boost exports. The scheme was launched in 14 sectors in FY21 and FY22.