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PLI scheme for auto sector

  • IASbaba
  • September 16, 2021
  • 0
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PLI scheme for auto sector

Part of: Prelims and GS -III – Economy 

Context The Union Cabinet has approved a Rs. 26,058 crore production-linked incentive (PLI) scheme to enhance manufacture of advanced technology and green vehicles, auto parts and drones.

Key takeaways 

  • Benefits: It will attract Rs. 42,500 crore in fresh investment into the automobile and auto components industry over five years
    • It will help create more than 7.5 lakh jobs.
  • The scheme has been devised for both existing automotive firms and new investors.
  • The ‘sales value linked’ scheme includes a ‘champion OEM’ incentive applicable on battery electric vehicles and hydrogen fuel cell vehicles.
  • A ‘component champion’ incentive is for advanced automotive technology components.

What is the PLI scheme?

  • The Product Linked Incentive (PLI) scheme aimS to boost domestic manufacturing under the government’s Atmanirbhar Bharat initiative.
  • It was introduced in March 2020 and is expected to result in a minimum production worth more than $500 billion in five years.
  • The scheme provides incentives to companies for enhancing their domestic manufacturing apart from focusing on reducing import bills and improving the cost competitiveness of local goods. 
  • PLI scheme offers incentives on incremental sales for products manufactured in India. 
  • Eligibility criteria for businesses under the PLI scheme vary based on the sector approved under the scheme.
  • Some of the sectors for which PLI scheme has been approved are:
    • Electronic or technology products 
    • Pharmaceuticals drugs 
    • Telecom & networking products 
    • Food Products 
    • High-efficiency solar PV modules

News source: TH 

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