Discuss the rationale of the Production Linked Incentive (PLI) scheme. What are its achievements ? In what way can the functioning and outcomes of the scheme be improved ?

Impact:

It is the scheme where incentives were given by the government for the increased level of production achieved by the enterprise.

i) Increase in Production

1. About 14 sectors were inducted into PLI scheme like Textiles, Drones, etc.
2. Aims to boost production, resulting in increase in GDP growth.
3. Acts as a stimulator to increase functioning of MSME's.

ii) Boosts employment

1. As production increases, the employment also increases.
2. Helps to channelize the less skilled labourers into economic cycle.

iii) Economic growth & Exports.

1. Boost export of Indian products, thus helps to increase foreign exchange.
2. Stabilizes the Balance of payment by reducing import dependence. Eg: India became Net exporter in Toy industry.

iv) Other implications

1. Opportunity for India to become a Global Manufacturing Hub, which was missed out in 1970's.
2. Better channelizing of India Demographic dividend. → Helps in mitigating the Jobless growth.
3. Boosts investor confidence and increases FDI into country. Eg: PLI for Semi-conductor Mission.
4. Decrease pressure on agriculture by eliminating disguised unemployment.

Underlying concerns:

1. Need for sufficient skill development of young population.
2. Need labour friendly reforms & its implementation.
3. Need to instill innovation, that could compete with global market.
4. Need for supportive & resilient supply chain mechanism that could counter global shocks.