The total incentive outgo under the ambitious production-linked incentive (PLI) scheme is estimated to be less than Rs. 40,000 crore by the fiscal year 2024-25 (FY25), when it completes the fourth year of implementation, according to the government’s internal estimates.
This means only a fourth of the allocated Rs 1.97 trillion is expected to be utilised by the end of FY24, indicating that not all the 14 PLI schemes would have taken off fully.
While three of the 14 schemes — large-scale electronics manufacturing, bulk drugs, and medical devices — were introduced in 2020, the remaining were launched the following year.
From FY23, companies started claiming incentives that are based on incremental sales of goods manufactured in India.
In FY23, the Centre had paid incentives worth Rs 2,874 crore to the PLI beneficiaries across eight sectors — mobile manufacturing, IT hardware, pharmaceutical drugs, bulk drugs, medical devices telecom, food products, and drones.
In FY24, the third year of the scheme’s implementation, the outgo is expected to touch Rs 13,000 crore.
For FY25, the incentive payout is estimated to hover around Rs. 23,000-24,000 crore, people aware of the matter told Business Standard.
Government officials had earlier said the next two fiscal years — FY24 and FY25 — would be crucial to utilising Rs 1.97 trillion, as they will determine how the scheme is progressing.
The scheme is one of the top priorities of the government since it aims to increase domestic manufacturing, create jobs, curb cheap imports, and boost exports.
The remaining five sectors — steel, textile, battery, solar PV, and automobile — are seeing slow progress, as incentive disbursements are yet to begin.
Individual ministries are analysing the situation in detail.
Last month, Commerce and Industry Minister Piyush Goyal met key stakeholders, including officials from ministries and government departments, to sort out the teething issues being faced by PLI beneficiaries.
The Centre has also started re-initiating talks with companies that have been shortlisted under the PLI scheme to come up with a prompt resolution.
The Department for Promotion of Industry and Internal Trade has been asked to nudge ministries to hold consultations with the PLI beneficiaries.