The Modi government may include sectors like garments, jewellery and handicrafts in the Production Linked Incentive (PLI) scheme to encourage employment generation while announcing the interim budget on 1 February.
Deloitte India Partner Rajat Wahi was quoted as saying by The Economic Times, "Leather, garment, handicraft, jewellery -- many of these sectors need PLI scheme to come in because they are the ones which are the highest employment generators."
The PLI scheme was started in 2021 and currently covers 14 sectors. However, according to Wahi, these sectors do not generate massive employment.
He says that to deal with inflation and slack in consumption demand, rural income should be increased and this can be done by generating employment in those sectors where these people work.
Deloitte's Budget expectation report said that the government should bring measures to support sustainable growth in income amongst rural households. This can be done by spending on rural infrastructure.
The other way to improve rural income is broadening the scope of PLI schemes to sectors such as chemicals and services, which will create demand for more manufacturing, according to Deloitte.
The PLI schemes have drawn over Rs 1.03 lakh crore in investments until November 2023 and generated over 6.78 lakhs jobs with production/sales worth Rs 8.61 lakh crore.
Deloitte also suggests PLI schemes for space tech startups. This can boost local manufacturing and encourage capacity building within the country, as well as attracting foreign investment.
Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.
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