Industrial Policy Maturity Index

Problem solved

PE infrastructure funds, OEM regional siting committees, and sovereign credit teams face a recurring question: PLI in India, IRA in the United States, Made in China 2025, Korea's K-Chips Act, the EU Chips Act. Which of these are real industrial policy with durable disbursement, and which are press releases. The framework produces a 0-to-100 score on the five dimensions that determine whether an investor can underwrite the incentive.

Inputs

• Statutory authority and budget appropriation: enacted versus authorized versus appropriated dollars
• Disbursement track record: announced versus committed versus actually disbursed, by year
• Conditionality: sourcing, employment, capex, and milestone gates
• Monitoring and clawback architecture: does the agency have the staff and the audit rights
• Political durability: cross-party support index, election-cycle continuity, judicial-review exposure
• Comparable program panel: peer programs in the same sector for benchmark scoring

Outputs

• 0-to-100 Industrial Policy Maturity Index score
• Five-dimensional radar: design, disbursement, conditionality, monitoring, durability
• Disbursement-to-commitment ratio with three-year trend
• Underwritability bands: investment-grade, speculative, headline-only
• Risk register: the three or four named risks that could halve the disbursement trajectory
• Peer benchmark row against a comparable program in another country

Method

1. Step 1. Score design (weight 0.20). Is the program statutory or executive-only. Is the budget appropriated or merely authorized. Is the application architecture functional. Are the eligibility rules stable.
2. Step 2. Score disbursement (weight 0.30). Pull the agency's own disbursement reports. Compute announced versus committed versus actually paid. The disbursement-to-commitment ratio at three years is the single most predictive sub-score.
3. Step 3. Score conditionality (weight 0.15). Are the sourcing, employment, capex, and milestone gates strict and verifiable. Or are they aspirational. Strict-and-verifiable scores higher because it produces audit certainty.
4. Step 4. Score monitoring and clawback (weight 0.15). Does the disbursing agency have the headcount, the audit authority, and the recoverable-funds architecture to claw back nonperformance.
5. Step 5. Score political durability (weight 0.20). Cross-party support index. Election-cycle continuity (does a change of government likely modify or repeal the program). Judicial-review exposure (is the program likely to be litigated and slowed).
6. Step 6. Combine, band, register risks. The composite gates the underwritability band. The risk register names the three or four scenarios that would halve the disbursement trajectory.
7. Step 7. Run the peer benchmark. Score a comparable program in another country on the same five dimensions. Use this to argue or refute the maturity claim against an external standard.

Assumptions

• Disbursement track record is the single most informative dimension. Announcements, commitments, and statutory authority are predictive only inasmuch as they translate into payments.
• Five years of program operation is the threshold for a stable IPMI score. Earlier-stage programs are scored with a wider confidence band and a 'provisional' flag.
• Cross-party support is a proxy for durability that fails in single-party regimes. The framework substitutes elite-coalition stability in those cases and flags the substitution.
• Peer benchmarking is anchored to a single comparable program selected upfront. Multiple peers are run as sensitivity cases.

Limitations

• Self-reported agency disbursement data is sometimes optimistic. The framework cross-checks against company-side capex disclosures and against trade flows for export-conditioned programs.
• Political durability is the dimension where reasonable analysts disagree most. The framework reports a low and a high score for this dimension and explains the spread.
• The IPMI is a comparative tool. It does not produce the absolute return on a single project, only the program-level uncertainty around it.
• Programs that bundle incentives across multiple statutory vehicles (CHIPS Act plus DOE loan plus state incentive) require a per-vehicle IPMI plus a stacking analysis.

Example application

Applied to India's Production-Linked Incentive scheme at five years across electronics, auto components, pharmaceuticals, and textiles. The IPMI runs the seven steps on each sector PLI, scores the disbursement-to-commitment ratio (mobile phones 78 percent, advanced chemistry cells 31 percent, large-scale electronics 64 percent), and bands the sectors. The brief uses the IPMI to argue that mobile-phone PLI is investment-grade, ACC PLI is speculative, and textile PLI sits at the headline-only band given the disbursement gap. See India PLI scheme at five years.