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.
- 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