India’s production-linked incentive (PLI) schemes have achieved only 28 per cent of their targeted employment generation, even as investment mobilisation has reached 76 per cent of the envisaged target, highlighting the uneven translation of the government’s manufacturing push into job creation, according to a first-of-its-kind assessment of the flagship schemes by NITI Aayog.
According to the Aayog, these figures reflect the aggregate implementation period of the PLI schemes so far, which accounts for more than half of their combined duration.
The 14 PLI schemes have completed 58 per cent of their aggregate implementation period, with 578 months elapsed against a total duration of 996 months. Launched between 2020 and 2021, the schemes have tenures ranging from three to 10 years.
The 14 schemes have generated 849,069 jobs by 2025-26 (FY26), against a target of 3 million. They have mobilised around ₹2.4 trillion against the investment target of ₹3.15 trillion and achieved production worth around ₹22.66 trillion, or 64 per cent of the ₹35.38 trillion target, by FY26.
The report, titled Impact Assessment of PLI Schemes, released on Thursday, called for refining the design of the schemes. “While the PLI scheme has shown encouraging early results, the focus now must shift from assessing its initial success to strengthening its long-term effectiveness. The way ahead lies not merely in continuing the scheme but in refining its design so that it can deliver deeper and more sustained industrial transformation,” it said.
Annual employment performance has not been uniform. Employment generation stood at 86 per cent of the target up to 2022-23, around 85 per cent in 2023-24 and 156 per cent in 2024-25, before falling to 31 per cent of the annual target in 2025-26.
“The divergence between cumulative employment and investment and production is important for interpreting the overall performance of the schemes,” the report said.
According to the think tank, this divergence must be understood in the context of the gestation period of manufacturing investments. “Investment generally takes place before facilities become fully operational; production then ramps up as capacity is commissioned and utilisation increases, while employment can evolve further as operations reach commercial scale,” the report said.
The report said PLI schemes in four sectors have been “on track” so far, based on an assessment of investment, production, exports and employment. These are large-scale electronics manufacturing, pharmaceutical drugs, telecommunications and networking products, and food products.
The Aayog’s assessment found that the impact of the bulk drugs PLI scheme on exports, the medical devices scheme on employment, and the Electronics/Technology Products (IT Hardware 2.0) scheme on investments had been weak or partial.
“Overall, the scheme has been successful. We never expected that everyone would perform across all indicators, but 70 per cent of players and indicators are on track,” said Ishtiyaque Ahmed, programme director at the think tank.
Aayog Chief Executive Officer and former Department for Promotion of Industry and Internal Trade secretary Anurag Jain said schemes requiring changes would be reviewed in coordination with the concerned line ministries to address the issues.
The schemes are now sufficiently advanced for emerging outcomes to be assessed but not mature enough to be judged solely against their ultimate full-tenure targets, the Aayog said.
While some sectors have responded strongly, with visible increases in investment, production, employment and exports, others have made relatively modest progress. This variation is often linked to differences in technology adoption, gestation periods, global competition and capital requirements.
“A sector-specific understanding of these constraints is necessary so that policy design can move beyond a uniform approach and become more strategically targeted,” the report said.
The next generation of PLI schemes will also take demand-pull measures into account, the report said. “The scheme in its current form is largely supply-driven. It encourages firms to increase production and build capacity through financial incentives linked to output. While this supply-push approach is important, long-term sustainability also requires strong demand-side support,” it said.
This could include stronger domestic procurement frameworks, export market development, strategic government purchasing and policies that stimulate consumption of domestically produced high-value goods.
Moreover, in many sectors, investment responds first, while the full effects on production, employment and exports emerge only after a significant lag, the report said. This is particularly true of sectors involving advanced technologies and long gestation periods.
Therefore, policy evaluation must remain patient and realistic, avoiding premature judgements while continuing institutional support where necessary, it said.
