Small firms need access to technology and low-cost finance not PLI: GTRI

New Delhi, May 22 (KNN) Global Trade Research Initiative (GTRI) on Monday suggested the government to help small firms with access to technology and low-cost finance.

In its latest report, the economic think tank said the government should not extend financial support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicrafts.

The move may shift business away from those enterprises, GTRI said in a report on Monday.

It also said PLI for industries like food processing or auto, where many domestic manufacturers make similar products, introduces competitive distortion by giving money to a few firms.

''PLI money at the rate 4-6 per cent of incremental sales could increase profit margins by 30-40 per cent, giving a considerable price advantage over others,'' GTRI Co-Founder Ajay Srivastava said.

He said non-PLI recipients suffer for no fault and the scheme should avoid incentivizing such sectors.

It should focus only on cutting-edge product groups where India has no manufacturing capabilities, he added.  (KNN Bureau)