India is offering incentives across 14 sectors and Kant says that ministries need to act fast for India not to miss the manufacturing opportunity.
Amitabh Kant
The next budget should focus on bringing in greater participation from the private sector, Amitabh Kant, G20 Sherpa of India, told Moneycontrol in an exclusive conversation.
India must take advantage of production-linked incentive schemes that offer output-based benefits for manufacturing locally in 14 sectors. There are indications that other sectors could be added to the PLI scheme in the FY24 budget.
The PLI scheme for mobile phones has helped India’s exports of these devices to $ 3.16 billion in FY21 from near zero in 2014. Mobile and electronics majors such as Apple and Samsung continue to invest in India. However, similar success is yet to be seen in sectors such as textiles, pharmaceuticals, specialty steel, and solar PV modules.
“Success of PLI in mobiles holds lessons for other sectors. Ministries working on PLIs in other sectors need to push much harder,” said Kant, who was the former chief of Niti Aayog.
Since the outbreak of pandemic, China has lost its sheen as a manufacturing star, and countries that outsourced much of their manufacturing to China are now looking at alternatives. With the China-plus strategy, countries are sprucing up to attract investments. The US passed the CHIPS Act in July to strengthen domestic semiconductor manufacturing design and research.
India has announced PLIs across 14 sectors with an outlay of Rs 1.97 lakh crore in a bid to strengthen its domestic manufacturing capabilities and attract investment. The goal is to create more jobs, national manufacturing champions and additional production of Rs 30 lakh crore over the next five years.
“If you delay this further, India will lose the opportunity,” Kant said. “India must become a key supplier. Ministries must deliver. PLI needs to deliver results in other sectors.”
Kant pitched for the government to exit businesses and attract greater participation of the private sector.
Catch the full conversation on Moneycontrol.com.
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