The cabinet today cleared Rs 26,000 crore worth of new production-linked incentive (PLI) scheme to boost the production of electric vehicles and hydrogen fuel vehicles in the auto sector. Through this scheme, nearly 7.5 lakh jobs will be created in the auto sector, as estimated by the government. The scheme will boost the global supply chain for advanced automotive technologies in India, enabling the country to manufacture environmentally cleaner electric vehicles and hydrogen fuel vehicles.
production linked incentive scheme for drones and drone components is also announced by the government through which it is expecting an investment of around Rs 5,000 crore in the next three years, and over Rs, 120 crores will be given to manufacturers in the stipulated time frame through this scheme. The government already launched Advanced Chemistry Cell (Rs 18,000 crore) and, Faster Adaption of Manufacturing of Electric Vehicles (FAME) (Rs 10,000 crore) under the PLI scheme to boost the manufacturing of electric vehicles for the auto sector.
In 2020, an outlay of Rs 57,043 crores was announced by the government to boost the automobile and auto components sector for a period of five years. The PLI scheme has covered the auto components like electronic power steering system, automatic transmission assembly, sensors, sunroofs, supercapacitors, automatic braking, adaptive front lighting, tire pressure monitoring system, and collision warning system.
The Budget 2021-22 promised overall production-linked incentives for the auto sector with an outlay of Rs 1.97 lakh crore. Society of Indian Automobile Manufacturers (SIAM), an auto industry body, said that the PLI scheme will increase competitiveness in the market and strengthen the growth of the sector holistically.
In the meantime, the shares of auto components rallied after the cabinet approved the incentives scheme for automakers on September 15. Shares of Jamna Auto, an automotive axle maker, rallied more than nine percent to hit an intraday high of Rs 93.79, whereas, Varroc Engineering advanced 18 percent, GNA Axles rose three percent, and Pricol advanced 5 percent among. Nifty Auto index shares on the National Stock Exchange also gained 0.5 percent after the announcement of the PLI scheme by the government.