Demystifying the Production Li...

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Demystifying the Production Linked Incentive Scheme

Demystifying the Production Linked Incentive Scheme

The Production Linked Incentive (PLI) scheme is a flagship initiative of the Government of India aimed at boosting domestic manufacturing and attracting investments in key sectors. This will not only scale up manufacturing capabilities but will also contribute towards import substitution and employment generation. With the objective to make India “Aatmanirbhar Bharat”, government has recognized 14 key sectors under the PLI scheme that will boost their competitiveness and will drive the economic growth. If your business falls under any of the following sectors, then you can avail the benefit of this scheme.

  1. Mobile Manufacturing and Specified Electronic Components,  
  2. Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical, Ingredients.
  3. Manufacturing of Medical Devices
  4. Automobiles and Auto Components,  
  5. Pharmaceuticals Drugs,  
  6. Specialty Steel,  
  7. Telecom & Networking Products,  
  8. Electronic/Technology Products,
  9. White Goods (ACs and LEDs),
  10. Food Products,  
  11. Textile Products: MMF segment and technical textiles,  
  12. High-efficiency solar PV modules,  
  13. Advanced Chemistry Cell (ACC) Battery, and  
  14. Drones and Drone Components.


PLI Scheme's Transformative Effect on Manufacturing Industries 


Launched in 2020, PLI scheme represents a landmark initiative aimed at revitalizing India's manufacturing sector and positioning the country as a global manufacturing powerhouse. Incentives are available on incremental sales (net of taxes) over the base year of goods manufactured in India. By providing targeted incentives to companies in different sectors, the government aims to boost domestic production, improve quality standards, and enhance the overall competitiveness of Indian industries. Due to PLI scheme, India's manufacturing sector has emerged as the main growth driver as the country continues to be a bright spot with over 7 percent GDP growth amid the global slowdown.

The incentives are provided in the form of cash grants or tax benefits, which help offset the additional costs incurred by the companies in setting up or expanding their manufacturing facilities. In addition to promoting domestic manufacturing, the PLI scheme also aims to attract foreign investments by offering a conducive business environment and competitive incentives. By incentivizing companies to manufacture in India, the government hopes to create a self-reliant and resilient economy that can withstand global economic shocks and disruptions.


PLI scheme was introduced to make India a global manufacturing hub and achieve the ambitious goal of transforming India into $5 trillion economy. The actual investment of Rs.62,500 crore till March 2023 has resulted in incremental production or sales over Rs.6.75 Lakh crore and employment generation of around 3,25,000. Sectors for which PLI schemes exist and have seen an increase in FDI inflows from FY 2021-22 to FY 2022-23 are Drugs and Pharmaceuticals which has experienced more than 46% growth, Food Processing Industries recording 26% growth and Medical Appliances industry seen a significant 91% growth.


PLI schemes have transformed India’s export basket from traditional commodities to high-value-added products such as electronics & telecommunication goods, processed food products etc. In Budget 2024, the government has also increased allocation in various sectors including electronics, semiconductors, automobile sector, food processing. The Budget allocated Rs.6200 crore for Production Linked Incentive scheme under the Ministry of Electronics and Information Technology (MEITY). The food processing scheme also saw 26% hike, reaching Rs.1,444 crore from Rs.1,150 crore in FY24 in Budget 2024.  


Maximizing Opportunities with Subsidy consultants


The primary benefit of the Production Linked Incentive scheme is received by Micro, Small, and Medium Enterprises (MSMEs), increasing overall production and job creation in the economy. To bring forward MSME sector, the government has also designed different MSME schemes for manufacturing sector. Various state governments like Haryana, Uttar Pradesh, and Rajasthan offer subsidy for manufacturing business setup in their states.  But to dive deeper into the ocean of financial incentives and subsidy schemes for manufacturing units, you will require the help of subsidy consultants who are already experts in this market.  Applying for PLI schemes and receiving letters of intent from the government is a complex endeavor for businesses. This is where subsidy consultants play a crucial role as they specialize in understanding government policies and schemes, including PLI scheme, and assist companies in identifying eligibility criteria, preparing applications, and navigating the compliance requirements.


By partnering with subsidy consultants, companies can effectively harness the benefits of the PLI scheme and contribute to India's journey towards economic prosperity and self-reliance. Subsidy consultants know the intricacies of such government schemes available for the industrial sector. They keep themselves updated on the latest policies and amendments. Subsidy consultants hold expertise in the application procedure for availing the subsidy benefit from the government.  


SubsidyPro is already ahead of the game, providing customized solutions and expertise to help you achieve financial incentives from the government. If you want to avail benefits of government subsidy schemes, partner with SubsidyPro as we provide specialized consultancy services customized for your business. Our professionals will advise you on the best subsidy scheme for your business and the eligibility criteria or clearances required to get maximum financial support from the government. SubsidyPro will streamline the whole application process and will guide you from registration till the disbursement of the subsidy in your hands.