PLI scheme may add USD 520 billion to GDP in 5 years: Report

PLI scheme may add USD 520 billion to GDP in 5 years: Report

• By Staff Writer

PLI scheme may add USD 520 billion to GDP in 5 years: Report

Mumbai: The production-linked incentive (PLI) scheme launched to boost local manufacturing may add USD 520 billion to the gross domestic product in the next five years, according to a report.

According to analysts, electronics, particularly mobile phone manufacturers, stand to be the biggest beneficiary of the scheme. Other sectors that will profit include automobile, battery, pharma, food, textiles and telecom.

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If materialised, the move will help cut imports on one hand and boost exports on the other.

'The PLI scheme may add around USD 520 billion to the GDP in the next five years,' domestic brokerage Sharekhan by PNB Paribas said in a note.

The scheme is applicable for 10 select sectors, which are labour-rigorous and expected to cater to the growing employment needs and achieving size and scale in manufacturing.

As part of the scheme, the government has made a budgetary outlay of Rs 1.96 lakh crore or USD 26 billion.

The scheme envisages providing on average 5 per cent of the production value as an incentive. This imply that minimum production as a result of the scheme stands to be around USD 520 billion over the next five years, says the report.

The idea is to create a few large manufacturing players with the advantage of policy support to the tune of 5-8 per cent of value add, scale and world-class technology.

If taken off as planned, the scheme could boost exports, thus narrowing the trade deficiency by USD 55 billion. PTI BEN BAL

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