GS3 Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Production linked incentive scheme

What is PLI Scheme?

• PLI aims to give companies incentives on incremental sales from products manufactured in domestic units. 

• The scheme invites foreign companies to set up units in India, however.

• It also aims to encourage local companies to set up or expand existing manufacturing units and also to generate more employment and cut down the country’s reliance on imports from other countries.

Objective-

to make domestic manufacturing globally competitive and to create global Champions in manufacturing.

The further objectives of the scheme are:

• Protect identified product areas

• Introduce non-tariff measures that make imports more expensive

• Acknowledge the relevance of exports in the overall growth strategy, with a renewed focus on the domestic market

• Promote domestic manufacturing by offering production incentives and encouraging capital investments

• Attract core knowledge competency and cutting-edge technologies

• Jobs and other employment opportunities etc. 

Incentives Under the Scheme

The Scheme shall extend an incentive of 4% to 6% on incremental sales (over the base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of  5 years.

Benefits of the PLI 

Government will invite large international corporations to establish capacities in India. So, there are several benefits of the scheme:

• Beneficiaries of this program receive assistance with affordable land acquisition, tax rebates, and concessions on import and export duties, among other things.

• It aids the anchor investors who are capable of overseeing new or existing projects as well as other investments.

• PLI also offers the advantage of reasonable product prices.

Challenges -

1. In India for the majority of the PLI Scheme focussed sectors the effective cost of manufacturing is higher than the competitors. For example, Ernst & Young study shows that if the cost of production of one mobile is Rs.100. Then the effective cost of manufacturing the mobile is 79.55 in China, 89.05 in Vietnam, and 92.51 in India(including PLI). So, the investors will prefer other countries despite the PLI scheme.

2. The Challenge of WTO:  In September 2019, Chinese Taipei contested the raise in tariffs under the Phased Manufacturing Programme(PMP). If the PMP is found to be the WTO non-compliant, then the growth of domestic industries is limited.

3. The problem of Cheap imported material: Domestic firms may also face competition from cheap imports. Especially from Chinese in Solar PV Modules, White Goods etc.

4. Third, lack of cutting edge technology and Foundries:  India so far not focussed on adequate R&D development and Raw machinery. This resulted in poor talent retention and eventually ‘brain drain’. So, the development of industries under the PLI Scheme is questionable.

Conclusion

India’s PLI scheme was so far has been able to attract 22 top companies, including Apple and Samsung mobile phones in the electronics manufacturing segment. Apart from that, it is also expected that, over the next five years, a manufacturing capacity of over $150 billion and exports of $100 billion will be tied up through the PLI scheme. Further, the government needs to rectify the challenges faced by Indian firms in manufacturing. Else India can become a global manufacturing hub of International companies.

Bura Chapori Wildlife Sanctuary

Recently, violence erupted in Assam's Bura Chapori Wildlife Sanctuary, resulting in the death of a woman and injuries to six others, including forest guards.

Important Facts 

It is a part of the Laokhowa-Burachapori ecosystem.

Located at South bank of the Brahmaputra River.

This sanctuary is home to the Great Indian one-horned rhinoceros, tiger, leopard, wild buffalo, hog deer, wild pig, and elephants. 

• The bird list includes the Bengal Florican (highly endangered), Black-necked Stork, Mallard, Open billed Stork, Teal, and Whistling Duck among others.

• Due to several wetlands it is an ideal breeding place for several species of migratory birds during the winter season.

• Flora: The grassland is also rich in various kinds of medicinal herbs and plants.