In a bid to push privatisation further, the central government may announce 7-8 new production-linked incentive (PLI) schemes in the upcoming Union Budget. The schemes will cover segments like textiles, electronic components, furniture, toys and leather, a report by Financial Express (FE) said.
According to media reports, the capital expenditure target may also see a spike. A report in Mint had earlier stated that the capex may be raised from Rs 7.5 trillion in the current year to Rs 10 trillion in FY24.
“This will be important for the NDA government as well, in the build-up to the 2024 general election. The Centre will also continue to nudge states and central public sector enterprises to raise their capex,” the FE report noted.
Since 2020, the government has already rolled out 14 PLI schemes. These schemes, according to FE, are expected to improve manufacturing by $500 billion by 2025. In March 2020, three PLI schemes were launched with an outlay of Rs 51,311 crore. These were given to mobile components, pharma ingredients and medical device manufacturing companies.
In the second round, in November 2020, 11 schemes were approved with an outlay of Rs 1.46 trillion. These included segments like food products, drones and telecom.
The Centre is trying to give an impetus to private investors in the backdrop of major institutes signalling a slowdown in the second half of FY23. Through PLI schemes, the demand side of the economy is not impacted. In high inflation, this means that the prices will not further elevate, making them a safe choice.