The Union Cabinet on September 15 cleared a Rs 25,938 crore performance-linked incentive (PLI) scheme for the automobile sector to boost the production of electric and hydrogen fuel cell vehicles.
The scheme also aims to generate investment and employment in the sector that took a hit after the coronavirus outbreak and is going through sweeping changes.
Here are the key takeaways of the plan:
– Combined with the incentive announced for the drone industry, the new PLI scheme has a budgetary outlay of Rs 26,058 crore.
– As per the government estimate, the scheme will generate an additional 7.5 lakh jobs in the auto sector.
– It is also estimated that over a period of five years, the PLI scheme for the automobile and auto components industry “will lead to a fresh investment of over Rs 42,500 crore and incremental production of over Rs 2.3 lakh crore,” the government said in a statement.
– The scheme is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business.
– The scheme has two components —Champion OEM Incentive Scheme and Component Champion Incentive Scheme.
“The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments,” the statement said.
– The Component Champion Incentive scheme is a “sales value linked” scheme, applicable to Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc, it added.
– The scheme will incentivise high-value advanced automotive technology vehicles and products.
– It will herald a “new age in higher technology, more efficient and green automotive manufacturing”, the government said.
This new scheme, combined with the already launched Advanced Chemistry Cell (ACC) scheme worth Rs 18,100 crore and Faster Adaption of Manufacturing of Electric Vehicles (FAME) worth Rs 10,000 crore, will “enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system”, the government said.