New Delhi: On Sunday, Commerce and Industry Minister Piyush Goyal engaged in in-depth conversations with companies receiving fiscal advantages through the production linked incentive (PLI) scheme. The minister interacted with 140 companies from the total of 1,300 manufacturing units spanning 14 sectors that have benefitted from the scheme. "We had predicted that approximately Rs 1.46 lakh crore would be invested in the 14 sectors...Our prediction suggests that we may see an investment of more than Rs 2 lakh crores initiated by the production linked incentive scheme (throughout the scheme period)," Goyal informed reporters after the meeting.
Regarding employment prospects, he mentioned that the initial estimate was for about 8.5 lakh jobs to be generated through the PLI scheme. However, based on recent figures, there is potential for approximately 12 lakh jobs to be created instead. We also anticipated an increase in production of around Rs 11 lakh crore. However, after hearing some of the figures today, I personally believe that the production for both domestic and export demand will exceed our initial expectations. The minister stated that the units in these sectors are performing well and are now able to invest, even without additional support to the manufacturing ecosystem, due to the rise in demand.
During the meeting, companies provided their recommendations, which included proposing specific changes to government purchasing procedures. In general, the policy remains unchanged, however, there are specific industries that require more time to establish the ecosystem, resulting in initially lower domestic value addition. It slowly ascends. I thought it was a great idea, so I requested my team to investigate if we could create a plan for these industries to upgrade to a higher level.
The prior experience requirement to participate in a government procurement for manufacturers who make some products for the first time in India or an innovative item may pose a challenge. "Obviously, if they are making it for the first time in India, or there is an innovation which is happening for the first time in India, it is very difficult to have a prior experience," he said, adding, "I have asked such sectors to get back to us with details so that we can take some technical expertise and its advice and see whether that same product can be through laboratory testing or other things can be made eligible to start supplying, being a new product or an innovative product without prior experience". The government has rolled out the scheme in 2021 for 14 sectors including electronics, pharmaceuticals, white goods, telecommunication and drones with an outlay of Rs 1.97 lakh crore. It aims to boost domestic manufacturing, attract investments and increase exports.
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