India is considering the inclusion of six more sectors under the Production-linked Incentive (PLI) scheme, which would make them eligible for incentives totaling up to Rs. 18,000 crore. The sectors being considered for inclusion are chemicals, shipping containers, vaccine inputs, toys, bicycles, leather, and footwear. These sectors would share the Rs.18,000 crore allocation derived from the original outlay of the PLI scheme.

As of now, there are already 14 sectors covered under the PLI scheme. Launched in 2020 as part of the “Make in India” initiative, these sectors include mobile manufacturing and specified electronic components, critical key starting materials/drug intermediaries and active pharmaceutical ingredients, manufacturing of medical devices, automobiles and auto components, pharmaceuticals drugs, specialty steel, telecom and networking products, electronic/technology products, white goods (ACs and LEDs), food products, textile products (MMF segment and technical textiles), high-efficiency solar PV modules, advanced chemistry cell (ACC) batteries, drones, and drone components.

The Production-Linked Incentive (PLI) scheme provides incentives to companies to invest in India and boost domestic production. However, the scheme has been partially fruitful due to major corporates” unwillingness to join the party. According to government officials, a fraction of the incentives earmarked under the PLI scheme has not been used so far.

In this scenario, the government plans to reallocate these unused funds to new sectors under the PLI scheme. In Financial Year 2023, India distributed nearly Rs. 2900 crore worth of incentives. However, certain sectors, such as specialty steel products, solar modules, and car components, received quite minimal amounts, as reported by a government document cited by Reuters.

For the current fiscal year (FY2024), the government plans to distribute as much as Rs. 11,000 crore. By 2024/25, payouts could reach Rs. 40,000 crore, the government suggests.

The government”s internal analysis suggests that payouts could reach Rs. 40,000 crore by the fiscal year 2024/25. These estimates may improve with adjustments to the scheme to expedite payouts, potentially granting some sectors additional time under the program.