PLI schemes attract over Rs 1.06 trn investment; pharma gets major chunk

Production-linked incentive (PLI) schemes for 14 sectors have attracted over Rs 1.06 trillion investments till December 2023 with pharma and solar modules accounting for nearly half of the total, according to government data.

The response to the schemes was tepid in sectors like IT hardware, auto, and auto components, textiles, and ACC battery storage till December last year.

The government in 2021 announced PLI schemes for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma with an outlay of Rs 1.97 trillion.

According to the data, pharmaceuticals and drugs sector attracted Rs 25,813 crore till December last year, exceeding the expected investments of Rs 17,275 crore.

The major beneficiary in this sector include Dr Reddy's Laboratories, Cipla, Glenmark Pharma, Biocon and Wockhardt Ltd.

As regards the high efficiency solar PV modules, the total investment was Rs 22,904 crore as against the expected investment of Rs 1.10 trillion.

In this sector, the PLI beneficiaries include Shirdi Sai Electricals, Reliance New Energy Solar Ltd, Adani Infrastructure and Tata Power Solar.

The other PLI sectors which received healthy investments till December last year included bulk drugs (Rs 3,586 crore as against expected investments of Rs 3,939 crore), medical devices (Rs 864 crore as against expected investments of Rs 1,330 crore), food processing (Rs 7,350 crore as against expected investments of Rs 7,541 crore), and telecom (Rs 2,865 crore as against expected investments of Rs 4,014 crore).

The lowest investment was received in IT hardware at Rs 270 crore against expected investments of Rs 2,517 crore.

The other PLI sectors with tepid investments included auto and auto components (Rs 13,037 crore as against expected investments of Rs 67,690 crore), textiles (Rs 3,317 crore as against expected investments of Rs 19,798 crore), and ACC battery storage (Rs 3,236 crore as against expected investments of Rs 13,810 crore).

According to an official, the government is reviewing and may look at tweaking the scheme for the sectors which are not performing well.

The government has disbursed Rs 4,415 crore under the scheme for eight sectors, including electronics and pharma, till October this fiscal.

A total of Rs 1,515 crore was disbursed in FY24 till October, while it was Rs 2,900 crore in 2022-23, when payments under the scheme commenced.

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.