Cabinet clears Rs 26,000 crore PLI scheme for auto sector to boost electric car production
In a major relief to the auto sector, the Centre approved around Rs 26,000 crore worth of new production-linked incentive (PLI) scheme, which will help boost the production of electric vehicles and hydrogen fuel vehicles in the country. The government estimates that the approved PLI scheme will most likely generate as many as 7.5 lakh jobs for the auto sector. The announcement comes on the backdrop of the scheme announced last year for the entire automobile industry, including vehicle manufacturing and its ancillary units, which cost Rs 57,043 crore, for a period of five years.
Now, the Cabinet reduced the scheme for the sector to Rs 25,938 crore to shift focus to hydrogen fuel vehicles and electric vehicles to be manufactured in India. The auto component sector covered under the PLI scheme includes- electronic power steering system, automatic transmission assembly, sensors, sunroofs, super-capacitors, adaptive front lighting, tyre pressure monitoring system, automatic braking, tyre pressure monitoring system, and collision warning system. The approved PLI scheme for the auto sector is part of the overall production-linked incentives announced for 13 sectors in the Budget 2021-22 with an outlay of Rs 1.97 lakh crore.
On the Government approving the Production Linked Incentive (PLI) scheme for the auto sector, Saurabh Kanchan, Partner, Deloitte India said, “Incentivizing new products such as electric vehicles and alternative fuels as well as advanced technologies such as ADAS, ABS and AT is a welcome move. This would aid in their localization and wider adoption, thereby enhancing the safety and consumer experience.”
The PLI scheme for the auto sector will bring fresh investments of over Rs 42,500 crore in five years and incremental production of over Rs 2.3 lakh crore. The PLI scheme for the automotive sector along with the already launched PLI for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) Scheme (Rs 10,000 crore) will give a big boost to the manufacture of electric vehicles. The incentive scheme envisages overcoming the cost disabilities for the industry for the manufacture of Advanced Automotive Technology products in India and will encourage the industry to make fresh investments in the indigenous global supply chain of Advanced Automotive Technology products.
The PLI scheme for the auto sector is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business. The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles (BEV) and Hydrogen Fuel Cell Vehicles (HFCEV) of all segments. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable to Advanced Automotive Technology components of vehicles; Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc.
News Credit: India Today
