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:
