Challenges Facing the PLI Scheme? UPSC Daily Important Topic | 25 September 2022

Challenges Facing the PLI Scheme?

✓No Common Set of Parameters:

There was no common set of parameters to understand the value addition by companies that have received or are likely to receive incentives under the PLI scheme.

At present, different ministries monitor the value addition of their respective PLI schemes and there is no way to compare two different schemes.

Also, there are various deliverables such as the number of jobs created, the rise in exports and quality improvement and there is no centralised database to gauge all these.

✓Target for Companies for Incentives too Steep:

Departments and ministries which interact with companies operating in their sector also face certain specific issues.

For instance, at times, the target for companies to qualify for incentives is too steep.

✓Domestic Companies Relied on One or Two Supply Chains:

Until 2021, only 3-4 companies managed to achieve the incremental sales targets to qualify for the PLI scheme from the fourteen companies that had been approved.

Unlike global companies, most domestic companies relied on one or two supply chains which have been severely disrupted and due to no fault of their own, these companies won’t qualify for the incentive.