Daily Current Affairs : 28-September-2024

India’s textile industry has long been a cornerstone of the country’s economy, but in recent years, its exports have stagnated. The Production Linked Incentive (PLI) scheme, launched by the government, is designed to address this challenge and boost the textile sector’s growth. The initiative aims to increase the sector’s global competitiveness, create millions of jobs, and significantly raise the value of textile exports.

The PLI Scheme for Textiles

The PLI scheme was introduced in 2021 to promote domestic manufacturing, reduce imports, and boost exports. Under the scheme, the government offers performance-linked incentives to companies based on the increase in their sales of domestically produced goods.

This year, around a dozen companies in India will receive incentives for the production of man-made fibers (MMF) and technical textiles, which are crucial components of modern textile manufacturing. This targeted support will help Indian companies improve production capacity, innovate, and compete globally.

Challenges in Textile Exports

Despite being one of the largest textile producers in the world, India’s textile exports have remained stagnant at around $35 billion. Meanwhile, competitors like Vietnam and Bangladesh have increased their market share by leveraging favorable trade agreements with other countries. This stagnation has hindered the growth potential of the textile sector, which remains an important part of India’s economy.

Job Creation and Market Expansion Goals

The government aims to create between 4.5 to 6 crore jobs in the textile sector by 2030. Additionally, the sector’s market size is expected to grow to $350 billion, driven by increased domestic production and export growth. The PLI scheme is expected to play a key role in achieving these ambitious goals.

Important Points:

  • PLI Scheme for Textiles: Launched in 2021 to boost domestic manufacturing, reduce imports, and increase exports.
  • Targeted Support: Incentives are being provided to companies producing man-made fibers (MMF) and technical textiles.
  • Stagnant Exports: India’s textile exports have remained flat at $35 billion, while countries like Vietnam and Bangladesh are gaining market share.
  • Job Creation Goal: The government aims to create 4.5 to 6 crore jobs in the textile sector by 2030.
  • Market Size Growth: The textile sector’s market size is expected to grow to $350 billion by 2030.
  • Incentive Mechanism: Performance-linked incentives based on the increase in sales of domestically manufactured goods.
  • Scope of the Scheme: PLI covers 13 sectors, including textiles, electronics, automotive, pharmaceuticals, and renewable energy.
  • Overall Budget: The PLI scheme has a total budget of Rs 1.97 lakh crore (about $28 billion).

Why In News

India’s Production Linked Incentive (PLI) scheme is set to provide a significant boost to the textile sector, with disbursements starting this fiscal year. The initiative is designed to tackle the stagnation in India’s textile exports, enhance global competitiveness, and promote job creation in the sector. By incentivizing domestic production and innovation, the PLI scheme also aims to reduce India’s reliance on imports, ultimately strengthening the country’s position in the global textile market.

MCQs about India’s Production Linked Incentive (PLI) Scheme

  1. What is the primary goal of India’s Production Linked Incentive (PLI) scheme for the textile sector?
    A. To increase textile imports
    B. To boost domestic manufacturing and exports
    C. To reduce textile exports
    D. To create a monopoly in the textile market
    Correct Answer: B. To boost domestic manufacturing and exports
    Explanation: The PLI scheme is designed to promote domestic manufacturing, reduce imports, and increase exports in the textile sector, thereby enhancing the sector’s global competitiveness.
  2. Which of the following sectors is NOT covered under India’s PLI scheme?
    A. Textiles
    B. Electronics
    C. Pharmaceuticals
    D. Agriculture
    Correct Answer: D. Agriculture
    Explanation: The PLI scheme covers 13 sectors, including textiles, electronics, pharmaceuticals, and renewable energy, but agriculture is not one of them.
  3. How does the PLI scheme incentivize companies in the textile sector?
    A. By offering subsidies on imports
    B. By providing performance-linked incentives based on sales growth
    C. By offering tax exemptions on profits
    D. By reducing production costs directly
    Correct Answer: B. By providing performance-linked incentives based on sales growth
    Explanation: The PLI scheme offers performance-linked incentives, which are provided based on the increase in sales of domestically produced goods, encouraging companies to enhance production and exports.

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