Economics • Indian EconomyHard
What is the primary institutional objective of the 'Production Linked Incentive (PLI)' scheme introduced across key manufacturing sectors in India?
A. To provide direct cash subsidies to agricultural exporters to offset logistics disadvantages
B. To offer financial incentives on incremental sales of manufactured goods produced in domestic units to boost manufacturing competitiveness and exports✓ Correct Answer
C. To subsidize interest rates on micro-loans extended to women self-help groups in rural districts
D. To finance public sector infrastructure projects through tax-free municipal bond issuances
💡 Solution & Explanation
The Production Linked Incentive scheme aims to incentivize domestic manufacturing by offering financial incentives based on incremental sales of products manufactured in India, thereby attracting investments in core sectors and reducing import dependence. It seeks to integrate Indian manufacturing into global supply chains and create domestic employment opportunities. Key sectors covered include electronics, pharmaceuticals, automotive, and specialty steel. Eligible companies receive incentives calculated as a percentage of incremental revenue over base year turnover.
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