India’s Key Manufacturing Scheme Receives $19 Billion in Investments

India’s Key Manufacturing Scheme Receives $19 Billion in Investments

India’s flagship manufacturing incentive scheme has attracted nearly $19 billion in investments as of November last year, according to the trade ministry. However, the government has decided not to extend or expand the program beyond its initial scope.

No Expansion or Deadline Extensions

Despite requests from participating firms, the government will not extend production deadlines or broaden the scheme beyond the 14 pilot sectors. This decision follows reports that the program has not delivered the expected results.

Investment and Production Achievements

Private firms under the scheme have produced goods worth nearly $163 billion, achieving 90% of the target set for the fiscal year 2024-25. However, the government has disbursed less than $1.7 billion in incentives, a fraction of the total allocated funds.

Low Payouts and Implementation Challenges

The incentive payouts account for only 8% of the intended subsidies. Most projects are still in the implementation stage, with claims for incentives typically made after the first year of production. The trade ministry expects further claims to be filed as these projects progress.

Future Outlook

While the scheme has attracted significant investment and production, the lower-than-expected incentive disbursement raises questions about its overall effectiveness. The government’s decision to maintain its current structure signals a focus on completing existing projects rather than expanding the initiative further.

“India’s Key Manufacturing Scheme Receives $19 Billion in Investments”