Govt disburses Rs 4,415 crore under PLI scheme; low job creation a concern

“Incentive amount of around Rs 4,415 crore disbursed under PLI Schemes for eight sectors including large-scale electronics manufacturing, IT hardware, bulk drugs, medical devices, pharma, telecom, food processing, and drones,” Additional Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajeev Singh Thakur said in a press conference.

On a question regarding low job creation commensurate with investments, Thakur said that several tech driven productions have low job creation. The government said that employment generation, both direct and indirect, is over 6.78 lakh. Former Reserve Bank of India (RBI) governor Raghuram Rajan had raised questions over lack of job creation under the scheme.

“The nature of these product lines is such that it is highly technology driven and the requirement of man power is limited. It will be challenging in the future when industry 4.0 comes in. It is a cause of concern but we will see job creation going forward,” Thakur said.

Thakur said the departments implementing their respective schemes are responsible for the disbursals. They, along with Project Monitoring Agencies (PMAs), scrutinise the claim applications and sometimes visit the plants, too.

He added that it has been observed that in some cases more time gets “wasted” on back-and-forth communication between PMAs and companies, “so it has been directed to ministries and PMAs to create an SOP (Standard Operating Procedure) and reduce the time for processing” of the documents. The remarks assume significance as certain quarters have raised concerns over slow disbursal of fiscal incentives under the scheme. “It has been told to the PMAs and departments to approve the claim and not to raise unnecessary objections,” he added.

As on date, 746 applications have been approved in 14 sectors with expected investment of over Rs 3 lakh crore. About 176 MSMEs are among the PLI beneficiaries in sectors such pharma, and telecom.

He said over Rs 1.03 lakh crore of investment was reported till November 2023, which has led to production/sales of Rs 8.61 lakh crore and employment generation (direct and indirect) of over 6.78 lakh. There are about 1,000 units under the scheme.
These schemes have witnessed exports surpassing Rs 3.2 lakh crore, with significant contributions from sectors such as electronics, pharma, food processing, and telecom.

“The disbursement is not showing the numbers but we are hopeful because investments are on target and in some cases achieved almost the tenure and similarly, production is also on the right path,” Thakur said.

By end of this fiscal, the disbursal target is Rs 11,000 crore. Departments are stating that they are going to achieve this target or are likely to get close to it, he said.

The schemes aim to attract investments in key sectors and cutting-edge technology; ensure efficiency, bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive.

Further he said the DPIIT has set up a system to facilitate visa applications for PLI beneficiary companies. He added that foreign direct investment has increased significantly since the inception of the PLI scheme for the electronics segment. Import substitution of 60 per cent has been achieved in the telecom sector, he added.