Production-Linked Incentive (PLI) Scheme

The Union Cabinet chaired by Prime Minister Narendra Modi approved the Production-Linked Incentive (PLI) Scheme for 10 key sectors.

Key Points for UPSC Prelims

• The scheme which was approved in November 2020, aims to enhance India’s manufacturing capabilities and export.
• Under the scheme, an incentive of 4% to 6% on incremental sales (over a base year) of goods will be provided to eligible companies.
• The PLI scheme will now be implemented by the designated Departments /Ministries. The implementation will be done within the overall financial limits prescribed.
• The Expenditure Finance Committee (EFC) will appraise the final proposals of the PLI scheme for individual sectors and the proposals will be finally approved by the Cabinet.
• If in case, there are any savings from one PLI scheme of an approved sector, then it will be utilized to fund another approved sector. Only Cabinet can approve any new sector for PLI.
• The financial outlay for all the selected 10 sectors has been allocated for a period of 5 years from the base year 2019-20.

10 Sectors of PLI Scheme

The 10 manufacturing sectors for which the PLI scheme has been approved are food products, Textiles, automobiles and auto components, white goods, pharmaceutical drugs, advanced chemistry cells (ACC), telecom, technology products, specialty steel, and capital goods.

Textile Ministry to roll out PLI for Man-made fibre (MMF) and Technical Textiles

• The Textile Ministry is working to carve out a structure to roll out the PLI scheme for Man-made fibre (MMF) and Technical Textiles.
• Under the PLI scheme, an allocation of Rs 10683 crore has been done for the textile products- Man-made fibre (MMF) and Technical Textiles.
• Rs 5000 crore has been allocated for Electronic/Technology Products.

Man-made fibre (MMF)

MMF is a fibre made by humans. It is of two types- cellulosic and synthetic fibres. Cellulose fibres are made from wood pulp and synthetic fibre is made from crude oil.