PLI Scheme: A Recipe to Boost India’s Food Processing Industry
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Case Code: ECON100 Case Length: 11 Pages Period: 2020-21 Pub Date: 2021 Teaching Note: Available |
Price: Rs.300 Organization : - Industry : - Countries : India Themes: Government & Economy, Government Policies |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
On March 31, 2021, the Government of India (GoI) approved a production-linked incentive (PLI) scheme for the food processing industry with an outlay of Rs.109 billion. The government had announced the PLI Scheme earlier that month with the objective of boosting domestic manufacturing and cutting down on import bills. The scheme aimed to give companies incentives based on incremental sales from products manufactured in domestic units. It not only encouraged domestic companies to set up business units or expand their existing manufacturing capacities, but also invited foreign companies to invest and set up food processing units in the country.
The production-linked incentive scheme for the food processing industry (PLISFPI) was to be implemented over six years (2021-22 to 2026-27), with the aim of creating global food manufacturing champions in the country and supporting Indian food product brands in the global markets. The scheme was expected to create 0.25 million jobs by the end of the year 2026-27, boost exports, encourage investments, and facilitate the expansion of food processing capacity to generate processed food worth Rs.334.94 billion in the sixth year (2026-27). Under the scheme, incentive was linked to local production and sale of products and the companies would be rewarded with incentives if they undertook a minimum prescribed investment in plant and machinery in the initial two years...
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