PLI scheme is no compensation in uncompetitive business environment: Maruti Suzuki Chairman

The Production Linked Incentive (PLI) scheme announced by the government for ramping up large-scale manufacturing capacity does not compensate for obstacles in an uncompetitive business environment, says Maruti Suzuki chairman RC Bhargava.

He is in support of policies that are directed at making manufacturing competitive by bringing down costs to make it affordable for domestic and international markets. During an interactive session with The Bengal Chamber, Bhargava said the PLI Scheme will help certain sectors and products. “It cannot compensate for the obstacles of being uncompetitive.”

The government had announced an outlay of Rs 1.97 lakh crore for the PLI scheme for 13 sectors including automobile in the 2021-22 Union Budget. The scheme aims at boosting domestic manufacturing under the government’s ambitious Atmanirbhar Bharat initiative. The PLI schemes are designed to trigger an impulse for scale both for Indian companies and companies from outside who wish to manufacture in India at very competitive costs. They are designed to have a domino effect creating pools of ancillary firms and services, and a wealth of jobs.

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According to Fortune, the PLI scheme rekindle manufacturing capacity, they are also aimed at sort of shock-proofing important areas of national sovereignty. Their efficacy works not merely to provide jobs and national revenue, but also a new lens through which the India of the future can be seen not just as a place that provides services, but also goods that are needed by the world.

Bhargava said Maruti Suzuki was not looking for new manufacturing plants as the industry CAGR for the last few years was less than 2%. “We only have to look for a site to relocate from Gurgaon. Have some additional land in Gujarat,” the chairman said. To attract investment, he said there has to be political and administrative will and measures to ensure costs are competitive.