Significant decline in employment figures against investment targets in PLI scheme

According to a report by News18, an impact assessment report of the Production Linked Incentive (PLI) scheme prepared by NITI Aayog has revealed a major imbalance between production and employment generation. This report, prepared in collaboration with IIM Ahmedabad, shows that while investment and production rates are growing rapidly in efforts to increase India's manufacturing capacity, employment generation has remained very slow this year. The report suggests that while momentum is being gained in the production and investment sectors, there are difficulties in achieving employment targets.

According to the data presented in the report, a highly challenging situation has been observed in the employment sector of India's ambitious PLI programme this year. Approximately three-fifths of the total period prescribed for the implementation of the scheme has already elapsed. During this period, investment has exceeded three-quarters of the cumulative investment target, and production has also reached 64 per cent of its total tenure target. However, regarding employment generation, it has managed only 28 per cent. In the previous financial year, employment generation was 156 per cent, compared to which this year's figures are very low.

The report, titled 'Impact Assessment of PLI Schemes', states that 14 different schemes have attracted a total investment of ₹2.40 lakh crore by March 2026. These schemes have also resulted in production and sales of ₹22.66 lakh crore. However, in terms of employment, only ₹8.49 lakh of the total tenure target of ₹30.18 lakh has been created so far.

When these achievements are compared with the elapsed period, this gap becomes even more apparent. These schemes have completed 58 per cent of their total implementation period. Investment achievement has reached 76 per cent and production 64 per cent, but employment has stalled at only 28 per cent. More precisely, in the year 2025-26, the proportion of employment remained at only 31 per cent of the annual target, whereas in the previous financial year, it was recorded at 156 per cent.

The report also presents a sector-wise analysis, showing that these efforts to increase production have been uneven. Under the automobile and auto-components scheme, ₹44,326 crore has been invested, but the proportion of employment is still below the target. Additionally, the results of exports in this sector cannot be fully assessed. Expansion has also been seen in the telecom manufacturing sector, but there remains a high dependence on foreign imports for high-value components, as local production is primarily limited to final assembly.

The figures for the battery manufacturing sector are more concerning. Against the target of 50 GWh of advanced chemistry cell manufacturing capacity, only 1.4 GWh capacity has been developed so far. The process of commercial production and incentive distribution in this sector has not yet begun. Factors such as dependence on foreign experts, imported machinery, lack of upstream capacity, and shortage of skilled manpower have been hindering the growth of this sector.

However, positive and encouraging results have been seen in some sectors. Significant progress and good results have been observed in the electronics manufacturing, medical devices, pharmaceuticals, food processing, and white goods sectors.