Chennai: About 35 per cent of the outlay for Production-linked Incentive scheme and Design-linked Incentive scheme has been invested as of May 2024. Another 11 per cent is expected to be utilized in FY25. In FY2022, the Government of India (GoI) announced the Production-Linked Incentive (PLI) scheme and subsequently Design-Linked Incentive (DLI) scheme in 14 sectors to boost manufacturing and exports, reduce imports, attract investments and technology, to make Indian manufacturers globally competitive. Of the total expected capex of Rs 4 trillion for the PLI and DLI schemes, Rs. 1.28 trillion has been invested as of May 2024, which is 30-35 per cent of the total estimated capex. Progress in manufacturing is visible in sectors like pharma, mobile phones, food products benefiting from the disbursement of incentives. However, major sectors with huge capex deployment are yet to start commercial production because of long gestation periods. The disbursements are minimal in sectors like solar PV modules, auto, and steel, which have higher capital deployment compared to other sectors, because of the longer gestation period to start commercial operations. ICRA expects 11 per cent of the outlay or Rs. 326 billion to be utilised for PLI/DLI incentives by end-FY2025. The government has been adjusting allocations, refining schemes, inviting applications, to maximise the utilisation of outlay. To maximise the utilisation, the government is planning to introduce additional incentive schemes for new sectors like toys, leather, footwear, which could aim to attract anchor investors to these fields. Of the expected incremental sales or production through the Incentive linked scheme of Rs 35-40 trillion, the current capex deployment has led to incremental sales of around Rs 10.8 trillion as of May 2024, which is 25-30 per cent of the total incremental sales anticipated from the incentive scheme. end
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