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How many Jobs has the PLI scheme generated, and how many will it generate in the future

Abhishek Kumar Singh by Abhishek Kumar Singh
21 September 2021
in Trending
PLI scheme, Modi government, Employment, india
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Indian economic policy has always been mired by one peculiar problem: to strike a balance between rising GDP and employment rate, in the country. However, the PLI scheme is all set to change the job-market scenario in the country. With the emphasis on Aatmanirbhar Bharat, Make-In-India and PLI scheme, employment generation is going to reach astronomical heights in the upcoming decade.

Job creation along with growth

Recently, the Indian government approved the PLI scheme for the drone and automobile sectors. The incentive provided by the government to the drone sector is 120 crores, while to the auto sector, it is nearly 26,000 crores. These incentives will help domestic as well as foreign investors to expand their manufacturing capacity inside the country. Along with the expansion, it will help in creating lakhs of jobs in the economy.

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  • The 120 crore incentive to the drone sector will attract more than 35,000 crores. These investments will help in creating more than 10,000 jobs alone in drone manufacturing. Other than direct drone manufacturing, the drone equipment and other feeder services to drone manufacturing is expected to create 5 lakh new jobs in the upcoming three years.
  • The 26,000 crore approved for the auto sector mainly focuses on electrical vehicle segments, a significant move from diesel and petrol vehicles in light of India’s promise to Paris climate goals. The move from petrol, diesel to electric vehicles alone will create additional 1 lakh jobs in next year.
  • The 6,238 crore incentive to the white goods sector will create four lakh direct and indirect jobs. These jobs will be in addition to the already existing ones. The PLI scheme is expected to bring in incremental investment of Rs 7,920 crores, incremental production worth Rs 1,68,000 crores, exports worth Rs 64,400 crores, and earn direct and indirect revenues of Rs 49,300 crore. The government has already received proposals worth nearly 6,000 crores.
  • In the manufacturing sector, incentives provided under the PLI scheme is expected to double the workforce in upcoming years. According to the Indian staffing federation, PLI in manufacturing will create an additional 1.40 crore man-month of jobs directly. With the inclusion of suppliers and vendors, a total of 4.20 crore man-man months of jobs are set to be generated
  • The 10,683 crore incentives provided to the textile sector is expected to usher more than 7.50 lakhs additional job creation in the sector. These jobs will be mainly focused around states like Gujarat, Uttar Pradesh, Maharashtra, Tamil Nadu, Punjab, Andhra Pradesh and Telangana.
  • The 15,000 crore incentive given to pharmaceuticals will generate 20,000 direct and more than 80,000 indirect jobs.

The signs of the PLI scheme generating a huge upsurge in employment have started to show. On the back of a 40,000 crore incentive under the PLI scheme for smartphones, Apple alone ended up creating 20,000 jobs in 7 months. Two Apple contract manufacturers have hired 7,500 workers each after August 2020, when the smartphone PLI became operational. While vendors supplying inputs to these two companies, like Sunwoda, Foxlink, Salcomp and others, have also hired approximately 5,000 additional workforces to support the manufacturing of the two contract manufacturer firms.

(PC: Iasgyan)

Need for PLI

The PLI scheme was launched in March 2020 to boost domestic manufacturing and cut down on import bills. Since 2014, the Modi government has been almost single-handedly doing investments in the country’s various infrastructure segments without much help from private sectors. Since the government could not always continue making investments in these capital intensive sectors (as they needed longer times to start giving the returns), it decided to invite global companies with adequate capital to set up capacities in India. The scheme will incentivise 13 sectors with a total outlay of 1.97 lakh crores. The minimum production in the country is expected to be around Rs 37.50 lakh crores, and the minimum employment generation is expected to be one crore over five years.

Also read: India’s exports hit record high riding on the success of the PLI schemes

Before the 1990s, India was facing a double whammy of low employment as well low GDP growth rates. As liberalisation in 1991 opened India for foreign investment, Indian GDP did improve, but minimal changes were observed in Indian employment scenarios. With the PLI scheme making inroads into the Indian economy, finally, Indian employment generation and GDP growth rates will, finally, be on parallel tracks in the upcoming decade.

Tags: Aatmanirbhar BharatMake In IndiaModi governmentPLI scheme
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