Chennai: Of the total capex expected from companies under the Production-linked Incentive scheme, only 25 per cent has been invested yet. Out of the incremental sales expected from the investment, only 20-25 per cent has been achieved.
The PLI scheme, which was launched in FY22 with a total outlay of Rs 1.97 lakh crore for 14 sectors, aims at enhancing India's manufacturing capabilities and exports. Of the 14 sectors, some sectors where manufacturing has started, have witnessed positive results in imports and exports, while some others are yet to see the benefits, finds ICRA.
Of the total expected capex of Rs 4 trillion to be incurred by corporates under the PLI scheme, which is over five-six years, Rs 1 trillion had been invested as of November 2023. This is around 25 per cent of the total estimated capex. Some sectors may have seen higher capex deployment than others according to the stage of manufacturing. However, major sectors with huge capex deployment like semiconductors and Advance Chemistry Cell (ACC) batteries, are yet to start commercial production.
Of the expected incremental sales through the PLI scheme of Rs 35-40 trillion, the current capex deployment resulted in incremental sales of around Rs 9 trillion as of November 2023. This is 20-25 per cent of the total incremental sales from the PLI scheme.
Eight sectors including phone, electronics, pharma, and food products, received the disbursements under PLI for FY2024 till November 2023. Two additional sectors - textile and white goods - may claim PLI incentives for FY2024.
According to ICRA, government intervention might help in making the PLI scheme successful in sectors that are lagging so far. A quick policy response such as a relaxation of the performance threshold might be needed in cases where lower traction is witnessed, the pick-up is not as expected, or where PLI disbursements are low.
