PLI Scheme Set to Boost Investments and Jobs, Says Icra

The PLI scheme is projected to attract Rs 3-4 lakh crore in investments over the next four years and generate 2 lakh jobs. Major projects in semiconductors, solar modules, and pharmaceuticals are expected. Private sector capex in various industries is also anticipated but requires government tax breaks for more disposable income.

In a significant development, the Production Linked Incentive (PLI) scheme is poised to draw investments amounting to Rs 3-4 lakh crore over the forthcoming four years, simultaneously creating 2 lakh jobs. High-volume projects in sectors such as semiconductors, solar modules, and pharmaceutical intermediaries are slated to stimulate substantial economic activity, according to a high-ranking Icra official on Wednesday.

K Ravichandran, Icra's Executive Vice President and Chief Ratings Officer, outlined the expectation of a private sector capex surge in industries like oil and gas, metals and mining, hospitals, healthcare, and cement. He highlighted the necessity for government tax breaks to boost disposable income, which is crucial for driving these investments to unprecedented levels.

The PLI scheme, introduced in 2021 and aimed at 14 sectors including telecommunication and medical devices, has already attracted over Rs 1.03 lakh crore investments as of November 2023, generating more than 6.78 lakh jobs. Despite the monetary increase in capex allocation in recent budgets, the percentage increase has somewhat decelerated, indicating an urgent need for private investment to sustain growth.

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