Excerpts from a conversation with <b>Sumit Sarabhai, Business Head, Emerging Vertical, TeamLease Services</b> in which he speaks about how the PLI scheme will drive growth and competitiveness in the manufacturing industry, how will the implementation of PLI scheme lead to increased investments in the manufacturing industry and more.
How will the PLI scheme drive growth and competitiveness in the manufacturing industry?
The PLI scheme is expected to drive growth and competitiveness in the manufacturing industry in several ways:
Encouraging Domestic Manufacturing: The PLI scheme aims to incentivize companies to manufacture their products in India, which will help reduce India's dependence on imports and boost domestic manufacturing. This will create new job opportunities and boost the country's economy.
Improving Product Quality: The scheme encourages companies to produce high-quality products by providing incentives based on the quality of products manufactured. This will improve the quality of Indian products and make them more competitive in the global market.
Increasing Export Competitiveness: The PLI scheme provides incentives to companies that export their products, which will increase India's export competitiveness. This will help Indian companies compete with foreign companies and increase their share of the global market.
Boosting Innovation: The scheme provides incentives for R&D activities, which will encourage companies to invest in research and development. This will lead to the development of new technologies and products, which will enhance India's competitiveness in the global market.
In what ways will the implementation of the PLI scheme lead to increased investments in the manufacturing industry?
Financial Incentives: The PLI scheme offers financial incentives to companies that manufacture products in India. This includes incentives based on the incremental sales of products manufactured in India and incentives for the manufacture of products with high domestic value addition. These incentives are expected to encourage companies to invest in manufacturing facilities in India and increase their production capacity.
Focus on R&D: The PLI scheme provides incentives for R&D activities, which will encourage companies to invest in research and development. This will lead to the development of new technologies and products, which will enhance India's competitiveness in the global market. Companies that invest in R&D are more likely to attract investments from foreign investors, who are looking to invest in companies that are innovative and have a strong technological base.
How will the PLI scheme encourage innovation and technological advancements in manufacturing?
PLI scheme encourages innovation and technological advancements in manufacturing in the following ways:
Adoption of advanced manufacturing technologies:The PLI scheme encourages companies to adopt advanced manufacturing technologies to improve their productivity and quality. These technologies include automation, artificial intelligence, robotics, and the Internet of Things (IoT).
Technology Transfer: The PLI scheme encourages the transfer of technology to India by offering incentives for the production of products that use advanced or emerging technologies. This will lead to the adoption of new technologies by Indian companies and help them become more competitive in the global market.
Cluster-Based Approach: The PLI scheme uses a cluster-based approach to incentivize the manufacturing of specific products in specific regions. This approach brings together companies, academia, and research institutions in a specific geographic location to collaborate on R&D activities and share resources. This collaboration will foster innovation and technological advancements in manufacturing.
What kind of employment opportunities will the PLI scheme create in the manufacturing sector?
Expansion of existing manufacturing facilities: Companies that receive incentives under the PLI scheme are likely to expand their manufacturing facilities to increase production capacity. This could lead to the creation of new jobs in areas such as production, quality control, and logistics.
Increased demand for skilled labor: With the growth of the manufacturing sector under the PLI scheme, there is likely to be an increased demand for skilled labor, including engineers, technicians, and other manufacturing professionals.
How will the PLI scheme impact the prices of goods produced by the manufacturing industry?
The impact of the PLI scheme on the prices of goods produced by the manufacturing industry would depend on several factors, such as the level of competition in the market, the cost savings achieved by manufacturers through the scheme, and the elasticity of demand for the products.
The PLI scheme is expected to lead to an increase in the domestic production of goods, which could lead to greater competition among manufacturers. This increased competition could lead to lower prices for consumers as manufacturers try to gain market share. Moreover, the PLI scheme incentivizes manufacturers to improve efficiency, reduce costs, and increase productivity, which could result in cost savings for the manufacturers. These cost savings could be passed on to consumers in the form of lower prices.
What will be the impact of the PLI scheme on the competitiveness of Indian manufacturers vis-a-vis their global counterparts?
The impact of the PLI scheme on the competitiveness of Indian manufacturers vis-a-vis their global counterparts would depend on several factors, such as the level of competition in the global market, the cost savings achieved by Indian manufacturers through the scheme, and the quality of products produced by Indian manufacturers.
The PLI scheme is expected to enhance the competitiveness of Indian manufacturers by incentivizing them to improve efficiency, reduce costs, and increase productivity. This could lead to lower production costs, which would make Indian manufacturers more competitive in the global market. Additionally, the scheme could help Indian manufacturers enhance their production capabilities and adopt new technologies, which would also enhance their competitiveness.
The global market is highly competitive, and many countries offer similar incentives and support to their manufacturers. Thus, the impact of the PLI scheme on the competitiveness of Indian manufacturers would also depend on how it compares to similar schemes offered by other countries.
