Centre launches new schemes to boost manufacturing

New Delhi: The next Union Budget will bring in new production-linked incentive (PLI) programs for more sectors like toys, footwear, textiles, and millet-based foods, in response to requests from both the industry and various government departments.

At present, PLI schemes are operational in 14 sectors such as mobiles, drones, telecom, textiles, automobiles, white goods, and pharmaceuticals.

The Department for Promotion of Industry and Internal Trade (DPIIT) proposed allocating Rs 3,489 crore for a PLI scheme on toys and Rs 2,600 crore for leather and footwear in the Interim Budget in February to boost domestic manufacturing and create job opportunities in labour-intensive sectors.

In the last year, multiple government agencies have supported an increase in PLI programs. Nevertheless, some authorities have previously recommended that new programs should only be implemented after assessing the efficacy of existing ones.

In discussions before the Budget with Finance Minister Nirmala Sitharaman, industry groups urged for the implementation of fresh schemes. The PHD Chamber of Commerce and Industry emphasized the importance of implementing additional schemes in labor-intensive industries like leather, gems and jewelry, medicinal plants, and handicrafts.

Once the upcoming plan is announced and launched, there will be no need for extra funding approvals, since the Centre had already set aside Rs 1.97 trillion for the 14 PLI schemes three years ago.

Still, out of the total budget of Rs 1.97 trillion, approximately Rs 41,000 crore has not been utilized. The unused funds could be transferred to other government departments that require additional funds for the PLI scheme, as per the scheme's flexible design.

The unused money is due to not enough interest, lackluster reactions to specific programs like textiles, bulk drugs, and white goods, and decreases in program funding.

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