Economics • Indian EconomyMedium
What is the primary economic objective of introducing the 'Production Linked Incentive' scheme across key manufacturing sectors in India?
A. To provide permanent operational subsidies to sick public sector industrial units
B. To boost domestic manufacturing competitiveness, attract global investments, and integrate into global value chains by offering financial incentives based on incremental sales✓ Correct Answer
C. To impose strict quantitative import quotas on finished electronic assemblies
D. To nationalize private manufacturing enterprises failing to meet export quotas
💡 Solution & Explanation
The Production Linked Incentive scheme aims to create domestic manufacturing champions by offering financial incentives calculated as a percentage of incremental sales over base years for eligible target sectors. Sick public sector units receive rehabilitation packages rather than output based manufacturing incentives. Import quotas contradict World Trade Organization commitments, making incentive based promotion preferable. This initiative successfully scaled up domestic production in electronics, pharmaceuticals, and specialized steel manufacturing.
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