Indian govt has announced Production Linked Incentive schemes (PLI) to boost manufacturing sector growth in India. As it can be seen it is biased towards capital-intensive industries. What could be the reason for this because generally labour-intensive sector leads to more job creation which would also be suitable for the electoral interests of the ruling political party?

A friend told me that capital-intensive industries that are involved in mass production should generate employment and it also has a multiplier effect through consumption so it takes a lot to lift the share of manufacturing as % of GDP But the same can also be said for labour-intensive sectors.

  • What leads you to believe that food processing and textiles are not capital intensive? Those are the very industries in which capital intensive manufacturing started in the industrial revolution.
    – ohwilleke
    Mar 2, 2023 at 18:24
  • 1
    corrected - I was relying on a news article Mar 2, 2023 at 18:30
  • I'm not too familiar with the initiative, but if it's linked to "Make in India", which Wikipedia says it is, what did you expect? It's mostly the advanced tech stuff that India imports rather things made in basic shops or in ploughing fields. (Having one kind of program doesn't entirely preclude the other kind, like agri subsidies, but ultimately they do compete in the same budget.) Mar 3, 2023 at 1:15


You must log in to answer this question.

Browse other questions tagged .