NE BUSINESS BUREAU
NEW DELHI, SEP 15
The Union Cabinet cleared a new production-linked incentive scheme worth Rs. 26,058 crore aimed at amplifying automobile production in the country. The scheme is expected to focus specially on electric vehicles.
Continuing the reform trajectory, the Cabinet has approved a PLI Scheme for the Auto Industry and Drone Industry. This will give an impetus to manufacturing and bring the sector at par with global trends as well as best practices. https://t.co/mfb7c2T1a1
— Narendra Modi (@narendramodi) September 15, 2021
Union Information Minister Anurag Thakur said the scheme is meant to enhance the country’s manufacturing capabilites in the auto, auto components and drone manufacturing industries. It would incentivize the emergence of advanced automotive technologies’ global supply chain in India. He added that the scheme would potentially provide employment to over 7.6 lakh people.
Incentives worth Rs 26,058 crores would be provided to the mentioned industries over a period of five years. The PLI scheme will bring fresh investments of over Rs 42,500 crore in five years and incremental production of over Rs 2.3 lakh crore, the minister said.
The PLI scheme for the automobile and drone industry is part of the overall announcement of PLI schemes for 13 sectors earlier announced in Budget 2021-22, with an outlay of Rs 1.97 lakh crore.
The PLI schemes for 13 sectors is expected to bring a minimum additional production approximately worth Rs 37.5 lakh crore over 5 years and additional employment of about one crore in the next five years.
“The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products. It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs. Further this will increase India’s share in global automotive trade,” the government said in a statement.
This PLI Scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) ( Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) ( Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
The PLI Scheme for the drones and drone components industry is aimed to address the strategic, tactical and operational uses of the technology. A product-specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is expected to build capacity. The PLI for drones and drone components industry is expected to bring investments worth Rs 5,000 crore over three years, increase in eligible sales of Rs 1,500 crore and create an additional 10,000 jobs.
The PLI Scheme for the Drones and Drone components industry addresses the strategic, tactical and operational uses of this revolutionary technology. A product specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is key to building capacity and making these key drivers of India’s growth strategy. The PLI for Drones and Drone components industry, will over a period of three years, lead to investments worth Rs 5,000 Crore, increase in eligible sales of Rs 1500 crore and create additional employment of about 10,000 jobs.
