Today the Modi cabinet has announced to implement the PLI scheme for the auto sector. 26,058 crore has been announced under the Auto PLI Scheme. This announcement is for the auto, auto component manufacturer and drone industries. The objective of this scheme is to make India a manufacturing hub for the auto sector. An incentive of 26 thousand crores will be given in the next five years.
It is believed that due to the incentives received under the PLI scheme, an investment of Rs 42500 crore will come in this sector in the next five years. This will create 7.5 lakh new employment opportunities as well as increase production by Rs 2.3 lakh crore. In the Budget 2021-22, Finance Minister Nirmala Sitharaman announced the PLI scheme for 13 different sectors. An outlay of Rs 1.97 lakh crore has been kept for this scheme.
Both existing and new companies will get benefit
Announcing this scheme, Union Minister Anurag Singh Thakur said that due to this, it will help in developing indigenous global supply chain for advanced automotive technology products. Apart from the existing auto company, the benefit of this scheme will also be available to those companies which are not in automobile or auto component manufacturing business.
The scheme is divided into two categories
Auto PLI Scheme has two parts. The first part is the Champion OEM Incentive Scheme which is a selling value linked scheme. This scheme is for battery electric vehicle, hydrogen fuel cell vehicle. The second part is the Component Champion Incentive Scheme. This is also the Sales Value Scheme which stands for Advanced Automatic Technology Component of Vehicle, Completely Knocked Down (CKD) and Semi CKD, 2 Wheeler Vehicle Aggregator, 3 Wheeler Vehicle Aggregator. It also includes passenger vehicles, commercial vehicles and tractors.