Experts say budget should focus on expanding the scheme to encompass green energy, advanced textiles, space tech and electronics components among others, as well as extend support to labour-intensive sectors for job creation
Industry experts feel that the Union Budget 2025 must focus on expanding the PLI scheme to encompass green energy, advanced textiles, space tech and electronics components among many others; Image: Dhiraj Singh/Bloomberg via Getty Images
Since its launch, the Production Linked Incentive (PLI) scheme has made significant strides in boosting India’s manufacturing sector. It has attracted over $17 billion (Rs 1.4 trillion) in investments across key industries such as electronics, automotive, and pharmaceuticals, driven Rs 11 trillion in production, and created over 1 million jobs as per Grant Thornton Bharat. These achievements underscore the transformative potential of the PLI scheme.
However, while progress has been made, there is still much more to be done to fully realise its impact. Industry experts feel that the Union Budget 2025 must focus on expanding the PLI scheme to encompass green energy, advanced textiles, space tech and electronics components among many others.
A crucial area of focus for the PLI scheme should be research and development (R&D). Sachin Sharma, partner, Grant Thornton Bharat, says, “Encourage R&D investments through tax exemptions for companies innovating in sustainable manufacturing technologies. Also, target incentives for domestic value addition and labour-intensive operations to boost employment.”
Even for a sunrise sector like drone tech, the PLI Scheme has been highly beneficial. Garuda Aerospace, for instance, has sold over 3,000 drones in just the last two years and accumulated over 1 million flight hours. “We believe that extending the PLI scheme beyond its current timeframe would provide greater stability and encourage long-term investments in R&D and manufacturing capacity, particularly in areas related to Unmanned Traffic Management (UTM) and advanced drone technologies. This expansion would create a more holistic ecosystem and encourage the development of comprehensive drone solutions,” says Agnishwar Jayaprakash, founder and CEO of Garuda Aerospace.
While the PLI scheme is a step in the right direction it does not put a premium on in-country value addition, and secondly, it needs to be oriented to job creation at scale, particularly through industries in the underserved Tier-2 cities. “It is imperative to extend more robust support towards labour-intensive sectors such as textiles, leather, food processing, and toy manufacturing. These industries are vital for grassroots employment and can contribute to India’s economic growth by significantly enhancing exports from the country,” says Aravind Melligeri, chairman & CEO, Aequs, a diversified contract manufacturing company.