The PMO seems disinclined towards approving new Production Linked Incentive (PLI) schemes for additional sectors and extending tenures for some of the existing ones with many requests from the industry and line-Ministries getting rejected by it or kept in suspension, sources have said.
“Last month, the PMO rejected a proposal for extension of PLI scheme tenure for solar panels. It is also not ready to approve the proposed PLI schemes for toys and footwear, despite the fact that token outlays were already allocated for these in the interim budget for FY25,” the source pointed out.
Moreover, Budget 2025-26 had no mention of a new PLI scheme for electronics components despite strong hopes from the industry backed by Ministry of Electronics and Information Technology (MeitY).
“While the final word on new PLI schemes is not out, the message from the PMO is clear that unless a proposal seems especially beneficial for the economy, approvals will not come. Ministries and Departments have been asked to focus on improving the working of the existing PLI schemes,” a source said.
14 SECTORS
The PLI scheme, covering a total of 14 sectors was announced in 2021 with an outlay of ₹1.97 lakh crore, to attract investments, incentivise local production in strategic areas and encourage exports. The support under the scheme, based on minimum investments and turnover, is provided over a period of five years.
The 14 sectors covered include mobile manufacturing; drug intermediaries & APIs; medical devices; auto & components, pharma, specialty steel, telecom products; electronic/technology products; white goods, food products, textiles (MMF segment and technical textiles), high efficiency solar PV modules, ACC battery and drones & components.
“A big reason behind the PMO’s cautiousness in expanding the scheme is the fact that it has not taken off as well as expected for many of the beneficiary sectors. It wants focus to be on ensuring that the existing ones pick up pace,” the source said.
In January 2025, the PMO rejected a plea from the Ministry of New and Renewable Energy for extension of scheme tenures for solar panels arguing that this would reward the non-performers. The toy and footwear sectors, too, would have to make do with the schemes to promote local manufacturing announced in Budget 2025-26, as there are no indications of the proposed PLI schemes being approved, another source said.
“The electronic component manufacturers faced disappointment in Budget 2025-26 because despite best efforts put in by MeitY, the proposed PLI scheme for the sector could not be announced. There is no clarity about the future as well,” the second source said.
Textiles PLI
A proposal made by the Textiles Ministry, to extend PLI scheme for man-made and technical textiles items, to cotton and other products as well, also hangs in balance.
Apart from mobile manufacturing, which has performed very well, and a handful of other sectors such as electronics, food processing, pharmaceuticals and white goods, that have started showing some promise, the remaining sectors are yet to pick up steam.