PLI Schemes: 18.51% of ₹1.91 Lakh Crore Outlay Disbursed by March 2026

The news

Cumulative incentive disbursements under the 14 production-linked incentive (PLI) schemes notified in 2020 stood at 18.51% of the total outlay of ₹1.91 lakh crore as of March 2026, according to an impact assessment report released by NITI Aayog and the Indian Institute of Management Ahmedabad on Thursday. The report showed that nine of the schemes, covering sectors such as bulk drugs, automobiles and textiles, had disbursed less than 10% of their respective outlays. Schemes for drones and drone components, large-scale electronics and food products, however, recorded disbursements ranging from 25% to 77% of their outlays.

The assessment noted that the schemes had cumulatively attracted investments of ₹2.40 lakh crore, generated production worth ₹22.66 lakh crore and created employment for over 8.49 lakh people. Nearly 70% of the targeted segments were broadly on track, with particularly strong outcomes in electronics, telecom and pharmaceutical drugs, the report added. The relatively modest share of cumulative disbursement is consistent with the performance-linked design of the scheme, under which incentives are released only upon achievement of specified investment, production and other eligibility criteria, rather than being front-loaded, the report said. As participating firms expand capacity, scale up production and meet progressively higher performance thresholds, disbursements are expected to increase over the respective scheme tenures.

The assessment also called for reforms amid criticism that some PLI programmes, including those for electronics manufacturing, have led to a sharp increase in imports, while growth in mobile phone manufacturing has largely been driven by assembly rather than employment generation. The report said the focus “now must shift from assessing its initial success to strengthening its long-term effectiveness”. NITI Aayog suggested a more focused assessment of sector-wise performance, noting that variation in outcomes is often linked to differences in technology adoption, gestation periods, global competition and capital requirements. The scheme in its current form is largely “supply-driven”, the report said, and recommended that future schemes of a similar nature incorporate demand-pull mechanisms alongside existing supply-side incentives. It also called for urgent standardisation of data collection and reporting mechanisms across ministries to improve transparency and allow mid-course corrections.

How are PLI incentives structured?

The 14 PLI schemes notified in 2020 use financial incentives linked to performance to encourage production and capacity creation across selected sectors. Schemes did not all come into effect in 2020, and some have longer gestation periods. Incentives are conditional on eligibility and performance rather than paid upfront, which explains why cumulative disbursement figures must be interpreted alongside differing implementation timelines.

What has the scheme achieved and where does it fall short?

By March 2026, the schemes attracted ₹2.40 lakh crore in investment and generated ₹22.66 lakh crore in production, with nearly 70% of targeted segments on track. However, nine of the 14 schemes disbursed less than 10% of their outlay, and criticism includes increased imports in electronics and mobile manufacturing concentrated in assembly rather than employment generation. The report recommends moving beyond a uniform approach to sector-specific policy design, and combining supply-side incentives with demand-pull mechanisms for long-term sustainability.

What reforms does the assessment recommend?

The assessment calls for standardisation of data collection and reporting mechanisms across ministries, noting that information on revenue, employment, production and exports is often inconsistent, making meaningful comparison and policy evaluation difficult. Clear guidelines on what firms should report, when reporting should take place and how annual progress should be monitored would improve transparency, strengthen policy feedback and allow mid-course corrections, the report said.