IIM-Ahmedabad to study why PLI schemes fell short, recommend course correction

The Indian government has tasked the country’s top management institute, the Indian Institute of Management, Ahmedabad (IIM-A), to find out why its flagship scheme to promote domestic manufacturing in various sectors has not delivered as expected, and suggest remedial measures.According to two government officials aware of the development, the study—to be conducted under the aegis of federal think tank NITI Aayog—will examine 14 production-linked incentive (PLI) schemes that have attracted around ₹2.16 trillion in investments since they were launched during the covid-19 pandemic in 2020.PLI schemes offer companies incentives linked to incremental domestic production, rewarding them for increasing output over a base year, rather than providing upfront subsidies.Despite a large outlay, the schemes have seen limited traction—of the nearly ₹1.91 trillion allocated for incentives, only about ₹28,748 crore or 15% had been disbursed by December 2025, according to a 20 February commerce ministry statement.“The study will undertake a comprehensive evaluation of the effectiveness of the scheme and focus on their impact on production growth, export expansion, job creation, and their role in enhancing India’s position in global supply chains,” the first official cited above said, requesting anonymity, adding that the study will also help understand whether the schemes need expansion or restructuring.Early indicators already point to uneven performance across sectors.Jaijit Bhattacharya, president of the Centre for Domestic Economy Policy (CDEP) Research, said that industries such as mobile phone manufacturing and food processing have done relatively well, largely because they require lower investments and are easier to scale.

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