Roadmap for Answer Writing

1. Introduction:

• Briefly introduce the Production Linked Incentive (PLI) scheme and its role in strengthening India’s manufacturing sector.
• Mention the long-standing nature of India’s industrial policy, with the last major update in 1991.
• Pose the central question: whether a new industrial policy is necessary, given the significant role of the PLI scheme.

2. Role of the PLI Scheme :

• Wide Coverage: Discuss the sectors covered by the PLI scheme (e.g., electronics, automobiles, pharma, textiles, etc.), which represent a significant portion of the economy.
  • Fact: The PLI scheme targets 14 key sectors, contributing to national economic growth.
• Large-Scale Investments: Explain the scheme’s ability to attract domestic and foreign investments, helping boost manufacturing in India.
  • Fact: As of November 2023, the PLI scheme attracted over INR 1.03 lakh crore in investments.
• Job Creation: Highlight the scheme’s potential to create millions of jobs by stimulating growth in the manufacturing sector.
  • Fact: The PLI scheme is expected to generate approximately 60 lakh new jobs in the next five years.

3. Need for a New Industrial Policy :

• Comprehensive Framework: Emphasize that while the PLI scheme is sector-specific, a new industrial policy is necessary to address broader issues such as infrastructure development, skill enhancement, and research and development.
  • Example: Infrastructure and skill development can be crucial for sustaining long-term industrial growth, which the PLI scheme does not fully address.
• Long-Term Vision: Stress the need for a long-term strategy to guide industrial growth for the next several decades, something that the PLI scheme’s short-to-medium-term focus does not cover.
  • Example: A new industrial policy could set ambitious strategic goals for industrial transformation, beyond the scope of the PLI scheme.
• Inclusive Growth: Point out that the PLI scheme primarily benefits large firms, while small and medium enterprises (SMEs) need more tailored support.
  • Example: The PLI scheme has benefitted large firms in sectors like automobiles and electronics, leaving out smaller businesses.
• Environmental and Social Considerations: Address the importance of integrating sustainability and social welfare into industrial growth, which might be overlooked by a narrowly focused scheme.
  • Example: A new industrial policy could set clear environmental standards and ensure that growth benefits all sections of society.

4. Conclusion:

• Conclude by stating that while the PLI scheme plays a pivotal role in boosting India’s manufacturing sector, a new industrial policy is essential for providing a more comprehensive framework for long-term, inclusive, and sustainable growth. The new policy should complement the PLI scheme by addressing areas that are not fully covered by it.

Relevant Facts and Points for Answer:

1. PLI Scheme Overview:
   • The PLI scheme covers 14 sectors, including electronics, automobiles, pharma, and textiles.
   • As of November 2023, the PLI scheme attracted over INR 1.03 lakh crore in investments.
   • The scheme is expected to create around 60 lakh new jobs over the next five years.
2. Need for a New Industrial Policy:
   • Comprehensive Framework: A new policy would address issues like infrastructure, skill development, and R&D, which the PLI does not directly address.
   • Long-Term Vision: A new policy would help set strategic goals for India’s industrial sector for the next few decades.
   • Inclusive Growth: The PLI scheme mainly benefits large firms, with SMEs needing more support.
   • Environmental and Social Considerations: Modern industrial policies must integrate sustainability and social welfare.