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
Excerpts
The PLI Scheme
The outbreak of the COVID-19 pandemic in March 2020 dealt a blow to the economy of countries across the world. To cope with the effects of the pandemic, the GoI introduced a series of economic measures to bring the economy back onto the growth track. One such measure was the introduction of the PLI Scheme in various sectors of the economy. One of the objectives of this scheme was to reduce India's dependence on foreign countries, especially China. The PLI Scheme aimed to incentivize companies on incremental sales (over financial year 2019-20) from products manufactured in the country...
Road Ahead
Despite the benefits, industry analysts raised concerns about the perceived impact of the PLISFPI on generating large scale employment in the sector. Since PLISFPI was a sales-linked incentive scheme, it might result in increasing the speed of this substitution of labor with capital, contributing to a further decline in labor intensity in the food processing industry, they said. Further, the demand for labor was badly hit by increasing mechanization and automation of the production sector. Apart from employment related issues, the organized food processing industry faced a number of challenges such as expensive production and packaging, inappropriate safety and quality management procedures, poor access to finance, inadequate infrastructure for transportation and storage, and poor adoption of technology...
Exhibits
Exhibit I: Salient Features of PLI Scheme for Food Processing Industry
Exhibit II: Categories of Applicants and their Eligibility Criteria under the PLIFPI
Exhibit III: Rates of Incentives under Incremental Sales
Exhibit IV: Key Outcomes of PLISFPI
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