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Production-Linked Incentive Scheme For Automobile Sector Receives Rs 2,819 Crore Budget
The Production-Linked Incentive (PLI) scheme for the automobile and auto components sector is set to receive a revised budget of ₹2,819 crore for the fiscal year 2025-26. This adjustment marks a decrease from the previous year's allocation of ₹3,500 crore.
The scheme, which spans from FY23 to FY27, is designed to bolster the manufacturing capabilities within the automotive industry and is divided into the Champion OEM Incentive Scheme and the Component Champion Incentive Scheme. This initiative has garnered significant attention, attracting proposed investments worth ₹67,690 crores.
As the fiscal year 2024 approaches its end in March, the scheme has already facilitated capital investments amounting to ₹14,043 crore. This financial injection has contributed to the creation of 28,884 jobs, progressing towards the ambitious target of 1.48 lakh job opportunities. With 85 applicants having received approval to participate, the initiative is demonstrating tangible impacts on employment and investment within the sector.
The scheme's total budgetary allocation stands at ₹25,938 crore, reflecting the government's commitment to enhancing India's automotive manufacturing landscape. Further support comes from the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, which received a substantial investment of ₹18,100 crore in May 2021. This program aims to advance India's capabilities in battery storage technology, a critical component for the future of electric vehicles and renewable energy.
Progress & Impact Of The PLI Scheme
By September 2024, the scheme had witnessed actual investments of ₹20,715 crore, with sales growth reported at ₹10,472 crore. These figures underscore the initiative's role in stimulating the automotive sector's expansion and enhancing its competitiveness on a global scale. Under the scheme, 18 companies have been approved within the Champion OEM category, and 67 companies have qualified under the Component Champion section, showcasing the wide-ranging impact of this policy on various facets of the industry.
The automotive production figures for FY24 further highlight the scheme's positive influence, with approximately 49 lakh passenger vehicles, 9.9 lakh three-wheelers, 214.7 lakh two-wheelers, and 10.7 lakh commercial vehicles manufactured in India. These numbers not only reflect the scheme's success in boosting production but also signify the potential for growth and innovation in the sector.
DriveSpark Thinks
The PLI scheme represents a strategic effort by the government to propel the automobile and auto components sector into a new era of growth and technological advancement. With substantial investments already made and significant production achievements, the initiative is on a promising trajectory to fulfill its objectives, thereby reinforcing India's position as a key player in the global automotive industry.
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