Context: Recently, the Union Cabinet approved a Rs 1.45 trillion production-linked incentive (PLI) scheme for ten more sectors to attract investments, boost domestic manufacturing, enable companies to become part of the global supply chain and generate employment opportunities.
PLI Scheme

• The PLI scheme aims to boost domestic manufacturing and cut down on imports by providing cash incentives on incremental sales from products manufactured in the country.
• Besides inviting foreign companies to set shop in India, the scheme aims to encourage local companies to set up or expand, existing manufacturing units.

What was the earlier PLI Scheme?

• As a part of the National Policy on Electronics, the IT ministry had notified the PLI scheme on April 1 this year.
• The scheme will, on one hand, attract big foreign investment in the sector, while also encouraging domestic mobile phone makers to expand their units and presence in India.
• It would give incentives of 4-6 per cent to electronics companies which manufacture mobile phones and other electronic components.
• A/c to the scheme, companies that make mobile phones which sell for Rs 15,000 or more will get an incentive of up to 6 per cent on incremental sales of all such mobile phones made in India.
• In the same category, companies which are owned by Indian nationals and make such mobile phones, the incentive has been kept at Rs 200 crore for the next four years.

What are the 10 sectors?

• The Cabinet decision was announced by Information and Broadcasting Minister and Finance Minister.
• The production-linked incentives will be offered for the sectors such as white goods manufacturing, pharmaceutical, specialised steel, automobiles, telecom, textile, food products, solar photovoltic and cell battery.
• The approved financial outlay over the five-year period for these 10 sectors will be Rs 1,45,980 crore.

The 10 sectors that will be entitled to get the incentives include:

Production-Linked Incentive (PLI) Scheme

• PLI Scheme is an outcome- and output-oriented scheme where incentives will be paid only if the manufacturers make the goods.
• It offers a production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units.
• The PLI scheme will be implemented by the concerned ministries/departments and will be within the overall financial limits prescribed. 
• This scheme will give cash incentives for five to seven years and all the sunrise and important sectors are proposed to be covered in this.
• The sectors may be automobile, networking products, food processing, advanced chemistry and solar PV manufacturing.
• The PLI Scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under the target segments, to eligible companies for a period of five years after the base year.
• The scheme envisages to boost local handset production will help meet the targets under NPE 2019.
• The Scheme will be implemented through a Nodal Agency which shall act as a Project Management Agency (PMA).
• The PLI scheme will help the country move towards the objective of ''Aatmanirbhar Bharat'' (Self-Reliant India).

Key Facts

• The Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. 
• White goods (air conditioners and LEDs) have very high potential of domestic value addition and making these products globally competitive. 
• India is expected to have a USD 1 trillion digital economy by 2025. 
• India is the world's second largest steel producer in the world.
• The Indian textile industry is one of the largest in the world and has a share of ~5% of global exports in textiles and apparel. But India's share in the manmade fibre (MMF) segment is low in contrast to the global consumption pattern.