India’s production-linked incentive (PLI) schemes have delivered only 28 per cent of their targeted employment generation by FY26, despite making considerably better progress in attracting investments. The findings of a NITI Aayog assessment highlight the challenge of converting India’s manufacturing expansion into large-scale job creation.
The 14 PLI schemes, launched between 2020 and 2021, have generated 8,49,069 jobs against a target of three million. In comparison, investments have reached Rs 2.4 trillion, or 76 per cent of the targeted Rs 3.15 trillion. Production has touched Rs 22.66 trillion, representing 64 per cent of the overall target of Rs 35.38 trillion.
The schemes have completed 58 per cent of their combined implementation period, leaving 42 per cent still to run. NITI Aayog cautioned that employment outcomes need to be viewed in the context of manufacturing investment cycles, where capital expenditure typically precedes production ramp-up and workforce expansion.
Employment performance has also fluctuated. Job creation reached 156 per cent of the annual target in FY25 but dropped to 31 per cent in FY26.
The assessment identified four sectors as being on track across key indicators: large-scale electronics manufacturing, pharmaceutical drugs, telecommunications and networking products, and food products. However, performance in certain areas, including employment under the medical devices scheme and investment under the IT Hardware 2.0 scheme, remained weak or partial.
The report has called for a more sector-specific approach to future PLI schemes, rather than applying a uniform policy framework. It has also recommended complementing production incentives with demand-side measures such as domestic procurement, export market development and strategic government purchasing.
These findings underline an important challenge: manufacturing growth and investment do not automatically translate into employment. Workforce planning, skill development and sector-specific talent strategies will be critical to ensuring that India’s manufacturing ambitions deliver broader job creation.