Boost For MSMEs As Government Plans Export-Linked PLIs

The Union government plans to launch a revised production-linked incentive (PLI) scheme combined with incentives for employment generation and exports for medium-sized enterprises.

The goal is to encourage small firms in the micro, small and medium enterprises (MSME) segment to expand their business operations and transition into the medium category, creating more job opportunities and integrating them into the global value chain.

A senior official was quoted by The Economic Times, saying that the plan is to boost the number of medium enterprises in India, currently only 0.01 per cent of total MSMEs.

NITI Aayog is developing a policy framework to include medium-sized units from engineering, electrical, chemical, and pharmaceutical sectors.

According to the official, the government believes that the existing MSME policy requires adjustments, such as a revised production-linked incentive scheme and specific sector-based incentives, to enable units to grow and transition to medium category.

The policy draft will soon be finalised and stakeholders' feedback will be sought by the Aayog before finalisation.

In March 2020, the government launched three PLI schemes for electronic products, pharma, and networking products. The number of schemes expanded later, reaching a total of 14.

Anil Bharadwaj, secretary general of the Federation of Indian Micro and Small and Medium Enterprises, suggested incentivising medium-sized enterprises to expand to generate employment in India.

He proposes a dedicated PLI scheme or other incentives, as the current PLI scheme focuses on capital incentive manufacturing, which is automated.