Prime Minister Narendra Modi on Friday took a veiled swipe at previous Congress governments, contrasting what he described as the “Production Linked Punishment” regime of the Licence Raj with his government’s Production Linked Incentive programme. He said the two approaches represented fundamentally different ideas of how the State should deal with businesses, production and economic growth.
Addressing the Economic Times World Leaders Forum 2026 in New Delhi, Modi said younger Indians might find it difficult to imagine a time when companies could face penalties for producing beyond limits fixed under government regulations. He used the term “PLP”, or Production Linked Punishment, to characterise that system and contrasted it with the PLI programme, under which eligible manufacturers receive incentives linked to incremental production.
‘Two different eras’
Modi said PLP and PLI illustrated the difference between the economic thinking of earlier governments and the approach adopted by his administration. Without directly naming the Congress during this portion of his remarks, he targeted the governments associated with the Licence Raj and also criticised those who, he said, continue to mock initiatives such as Make in India and Atmanirbhar Bharat.
The Prime Minister alleged that the earlier regulatory framework discouraged companies from expanding output even when demand existed, arguing that such restrictions ultimately constrained employment generation. He further accused previous governments of perpetuating scarcity and creating a system in which citizens remained dependent on the State for basic requirements.
Modi cited the PLI programme as evidence of a different approach towards manufacturing. According to figures given by the Prime Minister, PLI schemes have attracted investments of around ₹2.5 lakh crore, resulted in production and sales worth approximately ₹22 lakh crore and exports of about ₹15 lakh crore. He said the programme had also generated more than 14 lakh jobs.
Regulatory approach changing
The Prime Minister broadened his argument beyond manufacturing, saying the government was seeking to change the underlying philosophy of regulation. He said India was moving from a system of “prohibited unless permitted” towards one of “permitted unless prohibited”, under which an activity should generally not require regulatory permission unless it has specifically been prohibited by law.
Modi said this represented a change not merely in individual rules but in the relationship between government, citizens and businesses. His administration, he said, wanted governance to operate on the basis of greater trust rather than suspicion, while pursuing next-generation reforms at both policy and administrative levels.
He also pointed to changes in sectors including geospatial mapping, space and infrastructure as examples of deregulation. Modi said earlier restrictions meant even mapping activities required permission despite foreign satellites being capable of mapping India, while his government had sought to open such areas and remove unnecessary regulatory barriers.
India a ‘bright spot’
Modi placed the domestic reform push against an uncertain global economic backdrop. He said the world had experienced significant disruption in recent years, with resources increasingly being weaponised and distrust creating new economic and geopolitical challenges. Despite these pressures, he argued, India was being viewed internationally as a bright spot for growth and hope.
The Prime Minister attributed this position partly to political stability and continuity in policymaking, while stressing that reforms would remain a continuing commitment of his government. He also invoked India’s G20 presidency and its theme of “One Earth, One Family, One Future” to argue that countries could not pursue prosperity entirely in isolation.
Modi said the government would continue pursuing reforms irrespective of electoral considerations. He contrasted this with what he described as the approach of previous governments, alleging that policies in the past were frequently shaped by electoral calculations rather than long-term economic requirements.
From controls to incentives
The central theme of Modi’s address was the transformation he said had taken place in the State’s approach towards enterprise — from restricting production and requiring permissions towards encouraging businesses to invest, manufacture and expand.
His “Production Linked Punishment” formulation was also a political attack on the economic legacy of earlier governments. By setting PLP against PLI, Modi sought to frame the shift from the Licence Raj to the present manufacturing incentive regime as part of a larger transformation in governance.
The Prime Minister said the objective was not simply to amend regulations individually but to create a system that makes expansion easier for businesses while improving ease of living for citizens. With India seeking to increase manufacturing, attract investment and expand exports, he presented that regulatory shift as central to sustaining the country’s growth momentum in an increasingly uncertain global economy.