Cabinet clears Rs 26,000 crore PLI scheme for auto sector to boost electric car production

The government estimates that the approved PLI scheme will most likely generate as many as 7.5 lakh jobs for the auto sector.

In a major relief to the auto sector, the Centre approved around Rs 26,000 crore worth of new production-linked incentive (PLI) scheme, which will help boost the production of electric vehicles and hydrogen fuel vehicles in the country. The government estimates that the approved PLI scheme will most likely generate as many as 7.5 lakh jobs for the auto sector. The announcement comes on the backdrop of the scheme announced last year for the entire automobile industry, including vehicle manufacturing and its ancillary units, which cost Rs 57,043 crore, for a period of five years.

Now, the Cabinet reduced the scheme for the sector to Rs 25,938 crore to shift focus to hydrogen fuel vehicles and electric vehicles to be manufactured in India. The auto component sector covered under the PLI scheme includes- electronic power steering system, automatic transmission assembly, sensors, sunroofs, super-capacitors, adaptive front lighting, tyre pressure monitoring system, automatic braking, tyre pressure monitoring system, and collision warning system. The approved 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.