In 3-yr PLI push, phones, pharma, food dominate new jobs creation

Contact Counsellor

Last Updated05/12/2024

The Government’s flagship Production-Linked Incentive (PLI) scheme to boost domestic manufacturing has been a mixed bag so far in terms of job creation.

The Government of India’s ambitious Production-Linked Incentive (PLI) scheme, launched in 2020, aims to catalyze domestic manufacturing, boost exports, and create employment across 14 key sectors. While certain sectors have demonstrated significant progress, others remain sluggish, raising questions about the scheme’s effectiveness in meeting its job creation targets.

As of June 2024, the PLI scheme has generated 5.84 lakh direct jobs, achieving 36% of its target of 16.2 lakh jobs over five years. However, the performance varies significantly across sectors:

Mobile Phones: Leading the pack, this sector created 1.22 lakh jobs in three years and three months, with major global players like Apple establishing a robust assembly base.
Food Processing: Close to its six-year target of 2.5 lakh jobs, having already generated 2.45 lakh jobs.
Pharmaceuticals: A major contributor with substantial job creation and investment traction.

Textiles: With a revised job target of 2.5 lakh, it has only created 12,607 jobs over two years, hindered by eligibility challenges for smaller entities.
Advanced Chemical Cells (ACC) Battery: This sector has created just 802 jobs, as production is yet to commence despite initial approvals.
Solar Modules: Faced with a steep target, the sector has created only 9,521 jobs over two years.

The pandemic-induced disruptions, stringent eligibility criteria, and extended gestation periods have contributed to the uneven performance:
Sectors like auto components, IT hardware, and specialty steel are still in early implementation phases, with modest job creation figures.
Lengthy timelines for production commencement, especially in capital-intensive sectors like solar PV and ACC batteries, have delayed measurable impacts.

The government has allocated ₹1.97 lakh crore for the PLI scheme, attracting ₹1.23 lakh crore in private investments across sectors. While the scheme has bolstered India's manufacturing capabilities in mobile phones and pharmaceuticals, sectors like medical devices and automobiles face significant challenges to meet their targets.

Despite early hurdles, the PLI scheme has fostered a conducive environment for investment and innovation. Sectors like telecom and bulk drugs are on track to meet their targets, and the inclusion of global players enhances India’s positioning in the global supply chain.
However, for the scheme to realize its full potential, a focus on:
- Streamlining eligibility and compliance for smaller entities.
- Addressing sector-specific bottlenecks.
- Ensuring timely disbursal of incentives to sustain investor confidence.
The PLI scheme represents a transformative policy initiative, but its ultimate success will depend on sustained government-industry collaboration and a balanced approach to sectoral challenges.