Image Source: Reuters
A Production-linked Incentive scheme was launched by the Government in the last year. Earlier, it was launched in the mobile and its accessories sector but later on opened to 14 new sectors. In this scheme, incentives are given to the producer who produces the goods in the domestic market. It is offering over Rs 1.8 lakh crores of incentives to the producers who invest in local manufacturing.
Crisil in the report said that the PLI scheme can generate Rs 35-40 lakh crores in the coming five years. In the analysis, it also said that most of the new manufacturing should begin within the next 24-30 months to attract the Capex worth up to Ra 2.7 lakh crores.
This will also lead to positive growth in bank credit growth. Currently this year, bank credits are growing at a rate below 5%. This can increase up to 9-10% in the next fiscal year.