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Return of rent-seeking

PLI schemes have already set off the expected lobbying

Topics
PLI scheme | Manufacturing sector | Make in India

Business Standard Editorial Comment  |  New Delhi 



The government’s initial push under “Make in India” to attract manufacturing has not succeeded as hoped. Perhaps that is one reason, alongside a more general scepticism about trade that has caused the rash of recent 1970s-style industrial policy announcements, from “champion sectors” to “production-linked incentives” (PLI). Economists have warned that these inducements to investment have been tried in India before but come with a dangerous tendency to become self-sustaining, causing a permanent drain on the treasury without really improving competitiveness. The first signs of such a development are, sadly, already visible. A body representing mobile handset makers has said its members may miss their targets under the production-linked incentive scheme for 2020-21, but should nevertheless not be penalised. They say that the government could rework the five-year map for the scheme without compromising its overall direction.

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First Published: Mon, December 28 2020. 22:35 IST

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