Production Linked Incentive Scheme (PLI – SCHEME)
THE SCHEME OVERVIEW:
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Launched by the central government to boost domestic manufacturing and make India globally
competitive. The Government of India expects the nation to be well-positioned as a global hub for
manufacturing.
The PLI scheme aims to give companies incentives on incremental sales from products manufactured
in domestic units.
After the Aatmanirbhar Bharat mission came into action, the Indian Government became more
focussed towards the industry and plant setup to increase the production. Taking the same into
consideration, the government launched one scheme for the same called PLIs. Estimated 11.50 lakh
crore of investments and 12 lakh employments at the time of launching.
It’s an incentive distribution scheme to global and domestic companies based on certain parameters.
PLI Scheme shows dual character of attracting big foreign investments and encouraging domestic
manufacturer at the same time. This scheme will be active for 5 years and FY2019-20 as the base year
for calculation of incentive.
PLI scheme encourages local companies to set up and expand their existing manufacturing units.
The idea of such a scheme is important as the government cannot continue making investments in the
capital-intensive sectors which require longer time to start giving returns.
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The PLI Scheme for Textile:
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Cabinet issued 10,683 crore under the PLI Scheme over a span of 5 years.
Part of the PLI scheme was for 13 sectors.
The cabinet has approved a production linked incentive scheme for man-made and technical textile
sectors.
To run over the next five years, the scheme is expected to bring in 7.50 lakh new jobs.
Helps Indian producers to switch from Cotton textile to the new products, which account for two- third
of the global textile production.
Aims to promote the production of MMF (man-made fibre)
Technical textiles are textile materials
manufactured mainly for their technical
performance and functional properties
Competitive Advantage:
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Cabinet approved 10,683 crore and in the same time everyone is talking about Aatmanirbhar Bharat,
industrial setups, production increase, but why? It’s to get a competitive advantage compared
previously.
Even to get a global edge in textile, finance minister Nirmala Sitharaman launched another scheme
MITRA, additionally with PLI scheme.
As a textile industry, we are losing our grip in India to countries like Bangladesh and Vietnam. Such
steps will incentivise the garment manufacturing and textile industry.
The new PLI proposes to incentivise eligible manufacturers by paying between 3% - 11% on
incremental production.
Two categories of investments: a) Above Rs 100 cr
b) Above Rs 300 cr
Companies which will set up factories in tier-III and tier- IV will be given priority while allocating
incentives.
Increase in investment and employment.
The textile industry predominantly employs women, that will result to women empowerment and
increase women participation.
Sheetal Umar (50), Shreyas Nikhare (73), Tejas Khandelwal (80), Vinay Kumar (85), Vineet Lambu (86)
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MITRA:
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To create a world class infrastructure with plug and play facilities to create global champions in export.
7 textile Parks will be established over 3 years.
Comparison(India Vs Bangladesh & Vietnam):
Such parks have already been present in nations like China and Vietnam which help give a thrust to the textile
sector. India has been losing its competitive edge to Bangladesh and Vietnam owing to their low labour costs,
wider scale of operations and the Free Trade Agreement (FTA) advantage enjoyed by them.
Sheetal Umar (50), Shreyas Nikhare (73), Tejas Khandelwal (80), Vinay Kumar (85), Vineet Lambu (86)