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On Wednesday, the Union cabinet okayed production-linked incentive (PLI) schemes worth more than 26,000 crore over five years for India’s automobiles, auto-parts and drone industries, with a climate-friendly focus on electric and hydrogen-fuelled vehicles. It’s part of a broader self-reliance initiative taken by the Centre to attract investment in local manufacturing and help a range of sectors sharpen an export edge, a plan that was assigned a major role in our post-covid efforts at an economic revival.

Public funds to promote production have been used before, too, but in vain. This time, the programme is claimed to be far better designed. While beneficiaries welcomed it, critics have argued that a policy of cherry-picking champions in the private sector amounts to a distortion of market reward structures and would be vulnerable to the fallibility of centralized decisions as well as the corruption of hidden interests. As New Delhi has already taken a stance on the state championship of businesses, let’s track its impact on local sales and global markets in the years ahead. More hits than misses may yet justify it. Emission-free vehicles must succeed for other reasons too.

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