PLI scheme or Production Linked Incentive is an initiative by the Indian government to promote domestic manufacturing and attract foreign investment in various sectors. The scheme was first introduced back in 2020 and it offers financial incentives to companies that invest in India and meet specific production and revenue targets.

What are the objectives of the PLI scheme?

The objective of the PLI scheme is to boost domestic manufacturing in India. This is done by offering benefits and financial incentives to the companies who agree to invest in our country. This can also help in increasing the export figures and attract foreign investment as well. Apart from this, the PLI scheme also aims to increase the number of jobs and increase competitiveness in the market. 

What are the key features of the PLI scheme?

Sector-specific: The scheme is implemented in 14 specific sectors, such as electronics, pharmaceuticals, automotive, textiles, and food processing etc.

Incentive structure: Companies receive a percentage of their incremental sales revenue as an incentive, typically ranging from 4 per cent to 6 per cent.

Investment thresholds: Companies must invest a minimum amount in India to be eligible for the scheme.

Job creation: The scheme encourages companies to create jobs in India.

Time-bound: The scheme is usually valid for a specific period, such as 5-6 years.

How is the PLI scheme beneficial for the consumer? 

With more companies investing in domestic production, consumers will have access to a wider range of products. As companies increase production and reduce reliance on imports, prices may decrease due to reduced logistics and import costs. With more companies entering the market, consumers will have a wider range of choices in terms of products, features, and brands. 

Because of the benefits that the manufacturers get from the government due to the PLI scheme, they are able to price the vehicles in a more competitive manner.  

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