The success of the PLI is likely to hinge on how entrepreneurs weigh the risk-reward equation
The aim of the scheme is to specifically focus investment attention on 40 MMF apparel product lines, 14 MMF fabric lines and 10 segments or products of technical textiles. These 64 items have been chosen on account of being among the top-traded lines in the global market as well as India having less than a 5% share in each of them. The inclusion of intermediate products at industry’s request also reflects the Government’s keenness to ensure the scheme ultimately delivers on the broader policy objectives. The incentives have been categorised into two investment levels. Firms investing at least ₹300 crore into plant and machinery over two years for making a specified product would need to hit a minimum turnover of ₹600 crore before becoming eligible to receive the incentive over a five-year period, and at a second level an investment of ₹100 crore with a pre-set minimum turnover of ₹200 crore would enable qualification for the incentive. On the face of it, the scheme appears designed with a fair deal of thought, but its operational success is likely to hinge on how new entrepreneurs and existing companies weigh the risk-reward equation, especially at a time when the pandemic-spurred uncertainty has already made private businesses leery of making fresh capital expenditure.
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