Economics • Indian EconomyHard
Analyze the core objective and operational mechanism of the 'Production Linked Incentive' scheme introduced across key manufacturing sectors in India.
A. To provide financial incentives on incremental sales of manufactured goods in specified domestic sectors to boost domestic manufacturing capabilities and export competitiveness.✓ Correct Answer
B. To waive corporate income taxes permanently for all multinational corporations operating special economic zones.
C. To provide direct cash subsidies to retail consumers purchasing imported electronic appliances.
D. To nationalize loss-making heavy engineering industries to safeguard employment.
💡 Solution & Explanation
The Production Linked Incentive scheme aims to incentivize domestic and multinational manufacturing companies by offering financial incentives calculated as a percentage of incremental sales of products manufactured in designated domestic units over a base year. By targeting strategic sectors such as electronics, pharmaceuticals, automobiles, and specialty steel, the scheme seeks to overcome structural cost disabilities, attract large-scale investments, integrate India into global value chains, and reduce import dependency. Rigorous monitoring ensures eligibility based on meeting investment and production thresholds.
More Economics Indian Economy questions
- What does the 'Index of Eight Core Industries', compiled monthly in India, measure?
- Which organization in India calculates and releases the Index of Industrial Production (IIP) on a monthly…
- Which taxation head constitutes a major component of the state's own tax revenue (SOTR) collected directly by…
- What does the 'Fiscal Deficit' in the Union Budget represent?
- Which institution in India is statutorily responsible for formulating and releasing official estimates of…