Production Linked Incentive (PLI) Scheme
Recently, the Union Government approved a PLI (Production Linked Incentive) scheme for the auto sector with incentives of Rs 26,058 crore over five years. The government has also announced Rs 120 crore for the drone industry.
PLI Scheme:
The union government in March 2020 introduced a PLI (Production Linked Incentives) scheme that aims at providing companies incentives on incremental sales from products manufactured in domestic firms/units. It not only invite foreign companies to set up in India, but also encourages local companies to set up or expand existing manufacturing units. The Scheme has also been approved for various sectors such as automobiles, pharmaceuticals, IT hardware including laptops, mobile phones & telecom equipment, white goods, chemical cells, food processing, textile etc.
PLI For Auto Sector:
It is part of the overall PLI announced for 13 sectors in the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore. It is incentivizing only advanced automotive technologies Loans under this scheme are collateral-free loans. or auto components whose supply chains are weak, dormant, or non-existing. It excludes conventional petrol, diesel and CNG segments (Internal Combustion Engine) since it has sufficient capacity in India.
It has two components - first is Champion OEM (original equipment manufacturers) Scheme, It is a ‘sales value linked’ plan, applicable to Battery Electric and Hydrogen Fuel Cell Vehicles of all segments. Second is Champion Incentive Scheme, It is a ‘Sales Value Linked’ plan for advanced technology components, complete and Semi-Knocked Down (CKD/SKD) kits, vehicle aggregates of 2-wheelers, 3-wheelers, passenger vehicles, commercial vehicles and tractors.
The scheme is aimed at bringing scale in key sectors of the economy as well as create and nurture global champions.
It will increase competitiveness in the automotive sector as well as take its growth to the next level. It will help bring scale in key sectors and create and nurture global champions. It will give a big boost to the manufacture of electric vehicles. It will generate 7.5 lakh jobs for the auto sector. This will help component manufacturers strive for scale, which will require setting up of new facilities and create more jobs. It will contribute towards reducing carbon emissions and oil imports. It will encourage production of auto components using advanced technologies that will boost localisation, domestic manufacturing and also attract foreign investments.
PLI for Drone Sector:
It covers a wide variety of drone components, including airframe, propulsion systems, power systems, batteries, inertial measurement unit, flight control module, ground control station, communication systems, cameras, sensors, spraying systems, emergency recovery system, and trackers. It is expected to bring fresh investments of over Rs 5,000 crore and incremental production of over Rs 1,500 crore and create additional employment of about 10,000 jobs.
At present 90 % of the drones in India are imported. The government intends to make India into a global drone hub by 2030. It will encourage entrepreneurs to strive towards building drones, components, and software for the global market. It will also open many more verticals for the utilisation of drones.
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