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What is the PLI Scheme?

The Production Linked Incentive or PLI scheme is an initiative by the Government of India aimed at boosting domestic manufacturing by providing financial incentives to eligible companies. Under the scheme, companies that manufacture goods in specified sectors are eligible to receive incentives based on their incremental sales of such products.

The objective is to make Indian manufacturers globally competitive, attract investment, boost employment and enhance exports. The scheme has been widely used as a tool for promoting domestic manufacturing, reducing import dependency and fostering economic growth in targeted industries.

What are the Sectors covered under the PLI Scheme?

The scheme targeting 14 sectors was announced by the government in 2021.

• Mobile Manufacturing and Specified Electronics

• Drug Intermediaries & Active Pharmaceutical Ingredients

• Manufacturing of Medical Devices

• Automobiles and Auto Components

• Pharmaceuticals

• Specialty Steel

• Telecom & Networking Products

• Electronic / Technology Products

• White Goods

• Food Products

• Drones & components

• Advanced Chemistry Cell (ACC) Battery

• High-efficiency Solar PV modules

• Textile Products: MMF segment and technical textiles

What has been the Impact of the PLI Scheme?

The exports of mobile phones has increased by almost 100% in FY23 compared to FY22, underscoring a thriving export market for mobile phones manufactured in India. The healthcare industry also benefits from the scheme as the import of medical equipment decreased significantly owing to increased investments. The pharmaceutical industry has also benefited from enhanced production capacities and decreased dependence on imports. The inclusion of the IT hardware sector has also helped in improving the global competitiveness of the electronics manufacturing sector.

PLI-driven Hiring

The PLI scheme has had a positive impact on employment. The initiative has generated over 6.78 lakh employment opportunities.

Every new direct job in industries like electronics manufacturing creates almost 3 indirect jobs.

• 60% employers expect a 20% increase in employment in the next 2 years.

• 71% businesses in the SME sector expect an increase in PLI-driven hiring

• 2 of 3 employers foresee a net incremental growth in employment

Projections indicate that the scheme will create 60 lakh+ new job opportunities.

Workforce Challenges that limit the Benefits from Production Linked Incentive

The success of the PLI scheme hinges greatly on having a skilled workforce.

With rapid advancements & an expanding Talent Demand-Supply Gap, industries are encountering challenges in securing the right talent including:

• Skills shortage

• Unavailability of an Effective Talent Supply Chain

• Lengthy Hiring Cycles

• Growing costs to hire

• Competition for the same talent

• Employee Attrition

Amidst these challenges, PLI-approved sectors have the need to build a robust talent pipeline to meet the future demand.

Our latest whitepaper ‘People Supply Chain Innovation in PLI-approved Sectors’ explores the effective strategies in which HR leaders in these sectors can build a skilled workforce amidst the burgeoning skills gap. Download the Whitepaper

Alternatively, as a simpler approach,

Our team can explain the specific workforce challenges in PLI-approved sectors and take you through the advantages our innovative workforce development strategies can bring to your business. Contact us