Union Budget 2023: PLI schemes for bicycles, toys, leather on the anvil

The Production-Linked Incentive (PLI) scheme, which currently covers 13 sectors, is likely to be further expanded to several other areas like manufacturing of leather and non-leather footwear, toys, bicycles, vaccine materials and telecom products, sources said.

In the Union Budget for 2023-24, slated to be presented on February 1, Finance Minister Nirmala Sitharaman is likely to make substantial budgetary allocations for further expansion of PLI schemes.

The focus will be on the areas which are labour-intensive and have a high potential for exports.

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Several industry bodies and state governments have been pitching for the expansion of PLI schemes. Tamil Nadu, which contributes nearly 40 per cent to the country’s footwear and leather products output, recently urged the union government to provide production-linked incentives to leather and non-leather footwear sector.

Toy industry is among the focus areas of the government. It is likely to get the incentive under the PLI scheme. During his monthly Mann Ki Baat address in July last year Prime Minister Narendra Modi said India has the potential to become a powerhouse in the export of toys. The financial incentive to the sector is also important to cut the import of unsafe toys from China. According to the sources, PLI benefits will be given to BIS-compliant toys only.  

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Other sectors which are under consideration for PLI benefits include the manufacturing of bicycles, vaccine materials, chemicals, shipping containers and telecom products.

“PLI has done much to boost domestic manufacturing, investment as well as job creation. It is therefore advised that the government should continue to focus on it,” industry body Assocham said in its pre-budget recommendations.

The PLI scheme was rolled out in March 2020. In the first round, three sectors – manufacturing of mobile components, pharma ingredients and medical devices – received the benefits. In November 2020, the benefits under the PLI scheme were extended to 10 new sectors.

In the Union Budget 2021-22, presented on February 1, 2021, Finance Minister announced an outlay of Rs 1.97 lakh crore for the PLI schemes for 13 sectors.

According to the government, the minimum production in India as a result of PLI schemes is expected to be over $500 billion in 5 years. The stated objective of the scheme is to make “domestic manufacturing globally competitive and to create global champions in manufacturing”.

The sectors that have already been extended benefits under the PLI scheme include manufacturing of electronic/technology, pharma, telecom & networking, food, white goods, high-efficiency solar PV modules, automobiles & auto components, Advance Chemistry Cell (ACC) battery, textile products and speciality steel.