SBI Research Calls for Separate PLI Scheme for MSMEs

New Delhi, Jul 8 (KNN) In a move that could significantly reshape India's manufacturing landscape, SBI Research has proposed a dedicated Production Linked Incentive (PLI) scheme for Micro, Small, and Medium Enterprises (MSMEs). 

This recommendation comes on the heels of the existing PLI scheme's success in attracting investments and boosting economic activity across various sectors.

As of January 2024, the current PLI scheme has approved 746 applications across 14 sectors, with expected investments surpassing Rs 3 lakh crore. Notably, 24 per cent of these applications are from MSMEs, highlighting the scheme's impact on smaller businesses.

The existing PLI scheme has already shown impressive results. By November 2023, it had attracted investments exceeding Rs 1 lakh crore and catalysed incremental sales of Rs 8.61 lakh crore, with exports accounting for about 40 per cent of this figure. 

Key sectors contributing to this growth include electronics manufacturing, pharmaceuticals, food processing, and telecom products.

MSMEs, which contribute approximately 45 per cent to India's exports and 40% to manufacturing Gross Value Added (GVA), have been significant beneficiaries of the current PLI scheme. 

Industries such as bulk drugs, medical devices, telecom, white goods, food processing, textiles, and drones have seen notable improvements in their operations and market competitiveness.

The proposed MSME-specific PLI scheme aims to further enhance the sector's contribution to exports and manufacturing GVA. It is expected to facilitate employment generation across diverse industries, including textiles, garments, handicrafts, food processing, leather, electronics, auto components, and bulk drugs.

Experts believe that a tailored PLI scheme for MSMEs could also reduce India's import dependency, particularly from countries like China, thereby strengthening the nation's self-reliance and global market position.

As India continues to position itself as a key player in the global supply chain, the potential introduction of an MSME-focused PLI scheme could mark a significant step towards achieving comprehensive economic growth and enhancing the country's manufacturing capabilities.

(KNN Bureau)