The Union Cabinet has unveiled the Production-Linked Incentive (PLI) Scheme to encourage domestic manufacturing investments in ten key sectors.

PLI Scheme

• The PLI scheme aims to boost domestic manufacturing and cut down on imports by providing cash incentives on incremental sales from products manufactured in the country.
• Besides inviting foreign companies to set shop in India, the scheme aims to encourage local companies to set up or expand, existing manufacturing units.

UPSC can directly as the sectors included in the PLI scheme. Earlier it was only meant for Electronics manufacturing (particulary mobile phones).

What was the earlier PLI Scheme?

• As a part of the National Policy on Electronics, the IT ministry had notified the PLI scheme on April 1 this year.
• The scheme will, on one hand, attract big foreign investment in the sector, while also encouraging domestic mobile phone makers to expand their units and presence in India.
• It would give incentives of 4-6 per cent to electronics companies which manufacture mobile phones and other electronic components.
• A/c to the scheme, companies that make mobile phones which sell for Rs 15,000 or more will get an incentive of up to 6 per cent on incremental sales of all such mobile phones made in India.
• In the same category, companies which are owned by Indian nationals and make such mobile phones, the incentive has been kept at Rs 200 crore for the next four years.

10 new sectors added

The ten sectors have been identified on the basis of their potential to create jobs and make India self-reliant, include:

1. Food processing
2. Telecom
3. Electronics
4. Textiles
5. Speciality steel
6. Automobiles and auto components
7. Solar photo-voltaic modules and
8. White goods such as air conditioners and LEDs

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