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Budget 2024: New PLI Schemes Explained Simply | #BudgetSimpleHai

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There’s a lot of talk about the new Production-Linked Incentive (PLI) schemes that might be introduced in the Union Budget 2024. These new schemes could be for categories like toys, footwear, textiles, and even millet-based foods. Not sure what PLI schemes are? No worries, we'll explain it simply.

What Are PLI Schemes and Why Do We Need New Ones?

PLI schemes are designed by the government to encourage specific industries to grow. By giving financial incentives, the government hopes these industries will produce more and create more jobs. It's like a bonus system where companies get extra money if they meet certain production targets. This way, companies are motivated to produce more, which helps the industry grow and creates more job opportunities.

Industry experts, like those from the PHD Chamber of Commerce and the Confederation of Indian Industry, believe new PLI schemes are especially needed in sectors that require a lot of labour. These are industries where many people can find jobs, such as textiles, footwear, and toys. The idea is that by supporting these sectors, we can create more jobs and boost the economy.

Current PLI Scheme Status

Right now, ₹1.97 lakh crore has been set aside for PLI schemes, and around ₹41,000 crore of this is still unspent. This leftover money could be used to support new sectors in the budget. The government is looking at how to use these funds most effectively to boost production in new areas.

Since PLI schemes started in 2021, they have brought in investments of over ₹1.03 lakh crore. This has led to production and sales worth ₹8.61 lakh crore and created over 6.78 lakh jobs. However, some sectors like leather, garments, handicrafts, and jewellery haven’t seen as much benefit yet. These sectors have a lot of potential for job creation and should be considered for new PLI schemes.

Government's Commitment

In the interim budget, the government had increased the allocation for PLI schemes to ₹6,200 crore for the next year, which is a 33% increase from last year's budget. This shows their commitment to supporting manufacturing and supply chains in 14 key sectors, including mobile phones, pharmaceuticals, automobiles, and electronics.

Potential New Sectors

In Budget 2024, there’s a possibility that the government might introduce PLI schemes for new categories. Let’s take a closer look at these potential new sectors:

  1. Toys: The toy industry in India has a lot of growth potential. By introducing a PLI scheme for toys, the government can help domestic manufacturers compete with international brands, boosting local production and creating jobs.
  2. Footwear: Footwear is another sector that can benefit greatly from a PLI scheme. India is one of the largest producers of footwear, and with the right incentives, this industry can grow even more, providing jobs and supporting the economy.
  3. Textiles: The textile industry is a major employer in India. A new PLI scheme for textiles can help modernize the industry, increase production, and create more jobs.
  4. Millet-Based Foods: With a growing focus on healthy eating, millet-based foods are becoming popular. A PLI scheme for this category can encourage farmers and food manufacturers to increase production, leading to more employment opportunities in the agriculture and food processing sectors.

Benefits of Expanding PLI Schemes

Expanding PLI schemes to new sectors can have several benefits:

  • Increased Production: By providing financial incentives, the government can encourage companies to produce more, leading to overall industry growth.
  • Job Creation: More production means more jobs. This is especially important in labour-intensive sectors where a large number of people can find employment.
  • Economic Growth: Increased production and job creation contribute to the overall economic growth of the country.
  • Global Competitiveness: With the right support, Indian industries can become more competitive on a global scale, leading to increased exports and economic resilience.

PLI Schemes and Exports

The PLI scheme has already driven exports beyond ₹3.20 lakh crore, with major contributions from electronics manufacturing, pharmaceuticals, food processing, and telecom products. The scheme's long-term goal is to boost production, employment, and overall economic growth over the next five years. Continued support and expansion of the scheme can significantly enhance India's export capabilities and economic resilience.

What to Expect in Budget 2024

As we await the Budget 2024, keep an eye out for new PLI schemes. They could bring big changes to various industries, create jobs, and boost the economy. The government’s increased allocation for PLI schemes shows their commitment to supporting manufacturing and supply chains. New sectors like toys, footwear, textiles, and millet-based foods could see significant growth with the right incentives.

For all the latest updates, stay tuned to our website because with Bajaj Broking, #BudgetSimpleHai!

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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