Cabinet Clears Rs 26,000 Crore Scheme For Auto Sector To Boost Production
The government today cleared approximately Rs 26,000 crore worth new production-linked incentive (PLI) scheme for the auto sector, to boost the production of electric vehicles and hydrogen fuel vehicles. The PLI scheme will generate as many as 7.5 lakh jobs for the auto sector, as per government estimates.
The Cabinet also cleared a PLI scheme for drones and drone components, under which an investment of around Rs 5,000 crore in the next three years is expected. Over the next three years, Rs 120 crore will be given to manufacturers as part of the scheme.
The PLI scheme for the auto sector along with already launched PLI for Advanced Chemistry Cell (Rs 18,100 crore) as well as Faster Adaption of Manufacturing of Electric Vehicles (FAME) scheme (Rs 10,000 crore) will provide a big boost to manufacture electric vehicles.
Last year, the government had announced the scheme for the automobile and auto components sector with an outlay of Rs 57,043 crore, for a period of five years. The Cabinet has reduce the scheme for the sector to Rs 25,938 crore to shift focus on hydrogen fuel vehicles and electric vehicles.
The auto component segments that are covered under the PLI scheme include electronic power steering system, automatic transmission assembly, sensors, sunroofs, supercapacitors, adaptive front lighting, tyre pressure monitoring system, automatic braking, tyre pressure monitoring system, and collision warning system.
The 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.
Earlier, auto industry body Society of Indian Automobile Manufacturers (SIAM) said that the PLI scheme will increase competitiveness and strengthen the growth of the sector.
Meanwhile, shares of auto component makers on Wednesday, September 15, ralied after the Cabinet approved the incentive scheme for auto makers. Shares of automotive axle maker Jamna Auto rallied more than nine per cent to hit an intraday high of ₹ 93.70, whereas, Varroc Engineering advanced 18 per cent, GNA Axles rose three per cent, and Pricol advanced five per cent, among others.
Also, the measure of auto shares on the National Stock Exchange, Nifty Auto index, gained 0.5 per cent after the announcement of PLI scheme.