Economics • Indian EconomyHard
Analyze the features and economic objectives of the Production Linked Incentive (PLI) scheme introduced by the Government of India. What is its core mechanism?
A. To provide direct cash subsidies to loss-making public sector enterprises regardless of output
B. To offer financial incentives on incremental sales of manufactured goods in targeted domestic sectors to boost manufacturing competitiveness and exports✓ Correct Answer
C. To waive corporate income taxes permanently for all foreign multinational corporations operating in service sectors
D. To finance agricultural crop insurance premiums for marginal farmers across drought-prone districts
💡 Solution & Explanation
The Production Linked Incentive scheme provides financial incentives calculated as a percentage of incremental sales over a base year for goods manufactured in designated domestic sectors. The core objective is to enhance domestic manufacturing capabilities, attract global supply chains, reduce import dependence, and boost exports. It covers critical sectors like electronics, pharmaceuticals, and automotive components. Subsidies are disbursed only upon meeting rigorous production milestones and domestic value addition criteria.
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