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The Production-linked Incentive (PLI) scheme has succeeded in attracting investments and incentivizing domestic and foreign companies to set up or expand their manufacturing units in India. However, continuous refinement, monitoring, and addressing the associated challenges will be crucial in realizing the desired outcomes of the scheme. Analyse.

Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

4. The Production-linked Incentive (PLI) scheme has succeeded in attracting investments and incentivizing domestic and foreign companies to set up or expand their manufacturing units in India. However, continuous refinement, monitoring, and addressing the associated challenges will be crucial in realizing the desired outcomes of the scheme. Analyse. (250 words).

Difficulty level: Tough

Reference: Live Mint

Why the question:

The article highlights the ongoing debate between the PLI scheme and trade policy and tariffs as strategies to boost India’s manufacturing sector. It emphasizes the need for a nuanced approach that combines targeted incentives with a conducive trade policy to effectively promote manufacturing growth and competitiveness.

Key Demand of the question:

To write about the performance of Production-linked Incentive (PLI) scheme, its successes and limitations.

Directive word: 

Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.

Structure of the answer:

Introduction: 

Begin by giving context of Production-linked Incentive (PLI) scheme.

Body:

First, write about the various sectors for which PLI scheme was launched and its major features – electronics, pharmaceuticals, automobiles, and textiles. Eligible companies are provided with financial incentives based on incremental sales of goods produced in India, for a period of five years. The scheme aims to make India a global manufacturing hub, increase production of quality goods, create employment opportunities, and reduce dependence on imports.

Next, write about the successes and limitations of the above.

Conclusion:

Conclude by writing a way forward to overcome the limitations.