Mobile devices, Steel key sectors to meet PLI scheme 5 million job target

Achievement of this target will depend on textiles, speciality steels, white goods, autos and auto components, and high-tech mobile device manufacturing sectors

February 18, 2022

These sectors are expected to account for 53% of all jobs that will be generated through direct and indirect employment

The mobile device manufacturing sector will account for over 13% of all jobs generated

Apple, Foxconn, Wistron, and Pegatron have committed to generating 60% of 200,000 direct jobs in the manufacturing sector

Textiles and autos and auto components sectors are expected to generate 150,000 jobs collectively

Presenting the Union Budget 2022-23, Finance Minister Nirmala Sitharaman said that the production-linked incentive (PLI) scheme has the potential to generate at least 6 million new job opportunities over the next five years across 14 specified sectors. The achievement of this ambitious target will hinge on five of the 14 sectors, namely textiles, speciality steels, white goods, autos and auto components, and high-tech mobile device manufacturing. These sectors are expected to account for 53% of the jobs that will be generated through direct and indirect employment and produce goods worth INR 30 lakh crore over the next five years.

Mobile Device Sector Leading the Charge

Of the five, the mobile device manufacturing sector will account for over 13% of all jobs generated, with 200,000 direct jobs and 600,000 indirect jobs as Apple, Foxconn, Wistron, and Pegatron, have committed to generating 60% of the 200,000 direct jobs. It is inferred by industry analysts that the companies will also account for a similar percentage of indirect jobs. 

Textiles and autos and auto components sectors are expected to generate 150,000 jobs collectively, with the latter accounting for an incremental production worth INR 2,31,500 crore over the next five years. 

In fact, it was reported earlier this week that the PLI incentives for the automobile and auto components sector will lead to creation of 7.5 lakh additional jobs and incremental production worth Rs 2,31,500 crore over the next five years.

While the PLI scheme for white goods was expected to generate 400,000 jobs in five years, that number has been revised to 44,000 direct jobs, increasing the burden by nine times on indirect employment for the target was to be met.

Heavy Investments in the Electronics Manufacturing Sector

As per the Economic Survey 2021-22, INR 2,595 crore and production worth INR 67,275 crore were invested under the PLI scheme for large-scale electronics manufacturing, of which products worth INR 20,568 crore were exported. It must be noted that the commitment to generate employment is not a condition for eligible PLI companies to avail themselves of the financial incentives each year. The incentive scheme, which is 4% to 6% of production value, is attached to annual incremental investment and production value.

However, the government is keeping a close eye on the commitments made by PLI applicants and, thus far,  the jobs target set by companies in the mobile device space is on track. It is expected that this sector will generate over 100,000 additional jobs by the end of 2022 – which is half the target by the second year.