Gains from PLI Scheme Should be Durable and Not One-Off: Das

Thursday 23rd September, 2021

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RBI GOVERNOR SHAKTIKANTA DAS says Unicorns, schemes like Digital India and the shift to a hybrid financial sector will open Up opportunities for future growth Gains from PLI Scheme Should be Durable and Not One-Off: Das Our Bureau Mumbal: Productivity-linked schemes, push toward green energy, and a vast pool of information technology talent could be at the vanguard of growth revival as India clambers out of the Covid sinkhole, central bank governor Shaktikanta Das said. Mushrooming of Unicorns, programmes like Digital India and the gradual shift to a hybrid financial sector provide opportunities for future growth, but at the same time there is a need to reskill millions and the industry should aim at 1ifting the fortunes of millions of poor who have been hurt by Covid. "Leveraging technology in implementing government schemes, training and skill development programme for the unemployed, promoting women friendly-work atmosphere and supporting education of thepoor and marginalised sections would be areas of f0cus as we embark on our Journey beyond Covld-19," Governor Das said in his address at the meeting of the All India Management Association. "Income and job creation withdigitalisationand innovation can bring about a new age N andjob creation with digitalisation and innovation can bring about anew age of prosperity for alarge number of people of prosperity for a large number of people." Policy makers across the board are worried about the economic wreckage that hasled to widening of disparitiesand income inequality. While policy actions are getting tuned to address the weaker segments, there is an Increasing belief that the transformation in behavior caused by the pandemic could make livelihood difficult for millions. "The Production Linked Incentive (PLD scheme announced by the government for certain sectors is an important initiative to poost the manufacturing sector," said Das. "Itisnecessary that the Sectors and companies which benefit rom this scheme utilise this opportunity to further improve thelr efficiency and competitiveness. In other words, the gains from the scheme should pe durable and not one off. A recent RBI study pointed out that banks and financial institutions sanctioned only 220 project proposals of theprivatecompanies during 2020-21, a record 1ow in recent years. The total cost of projects sanctioned too declined sharply to 75,558 crore in 2020-21 from 1,75,830 crore in 2019-20. However, there are signs of improvement in capital expenses and onesuch indicator is pick up in FDI inflows. To help improve investment climate and better attract FDI inflows, the government has introduced the Production Linked Incentive schemes across various manufacturing sectors, lowered corporate tax rates with additional cuts for new manufacturing facilities, and undertaken farm and labour reforms among other measures. The governor said that potential realization would also require bullding infrastructure. "We need a big push to Infrastructure particularly in areas of health, education, 1ow carbon and digital economy In addition to transport and communication," said Das. "In addition, the warehousing and supply-chain infrastructure will be critical to bolster value addition and productivity in the agriculture and horticulture Sector. This will create employment opportunities in semi-urban and rural areas and promote Inclusive growth." Continued on Smart iw esting PLI Gains Should be Durable: Das From ETMarkets Page 1 Underscoring the role of global trade in faster economic recovery, the governor highlighted the need to push exports to newer destinations and also focus on high-tech exports. "Mmdia's exports of agricultural commodities, including Geographical mdications (GI) certifled products to newer destinations, offer favourable prospects for overall export," Das said. "Furthermore, exports of engineering goods which account for around one-fourth of India's total exports experienced robust growth across product categoriles and newer markets. To further strengthen the export potential, there is aneed toenhance the share of high-tech engineering exports to achieve an ambitious engineering export target of $200 billion by 2030