PLI scheme to attract Rs 4 lakh cr capex over next 5 years, says ICRA

New Delhi, Feb 18 (KNN) The production-linked incentive (PLI) scheme initiated by the central government has the potential to attract capital expenditure (capex) of over Rs 4 lakh crore over the next five years, said ICRA rating agency.

It has also indicated that it will provide an impetus to generate millions of employment opportunities for skilled as well as unskilled labour.

Commenting on its recent findings about the PLI scheme, Rohit Ahuja, Head of Research and Outreach, Icra, said, “Currently the total capex majorly comprises of the manufacturing capex that is 20 to 25 per cent, and with the PLI scheme the manufacturing sector will be incentivised attracting approximately Rs 4 lakh crore over the next five years."

The scheme is also going to reduce net imports along with incremental revenues of Rs 35-40 lakh crore as sectors under the PLI scheme has institute 40 per cent of the total imports, said Icra.

In view of the semiconductor disruption in the global supply chain and government’s step to include PLI for semiconductor manufacturing will substantially help India in addressing its semiconductors needs, Icra said.

Ahuja has also stated that India’s manufacturing productivity in view of GDP is equivalent to that of US, European Union, Russia and Brazil, however it still hasn’t reached the capacity China has in the manufacturing sector.

Owing to change in geopolitics, and China’s own concerns is a strategic time for India to gain its foothold with the timely PLI scheme. (KNN Bureau)