PRODUCTION LINKED INCENTIVE SCHEME FOR AUTO AND DRONE SECTORS
WHY IN THE NEWS?
Recently, the Government of India has announced Production Linked Incentive(PLI) Schemes for the auto, auto component sector, and drone industry.
WHAT ARE PLI SCHEMES?
To boost domestic manufacturing in India towards an Atmanirbhar Bharat and cut down on imports, the government of India had announced Production Linked Incentive(PLI) Schemes for 13 sectors in Union Budget 2021-22 with an outlay of 1.97 lakh crores.
It aims to give companies incentives on incremental sales from products manufactured in domestic territory.
By introducing PLI Schemes in 13 industries it is expected to increase production in India by about 37.5 lakh crore over the next five years and an increase in employment of nearly 1 crore.
It is a kind of subsidy to sectors and is based on disadvantages or disabilities faced by sectors, and the amount varies from sector to sector.
These schemes aim to promote manufacturing in India, taking steps ahead towards the goal of Atma Nirbhar (self-reliant), globally competitive and future-ready Bharat.
PLI SCHEME FOR AUTO AND AUTO COMPONENT SECTOR
The Government of India has allocated Rs 26,058 crore (Rs 25,929 crore for the auto and Rs 120 crore for the drone Industry) for production-linked incentive (PLI) schemes for the auto, auto component sector, and drone industry.
PLI Scheme for the auto sector can be accessed by both existing automotive companies and as well as new investors who currently are not in the automobile or auto component manufacturing business.
COMPONENTS OF SCHEME
It has two components-
- Champion OEM Incentive scheme
- Component Champion Incentive scheme
- Overcome Cost Disabilities-
This scheme will help in overcoming the cost of disabilities for manufacturing advanced automotive technology products in India.
2. Bring Fresh Investments-
It will encourage the sector to introduce fresh investments for the global supply chain of Advanced Automotive Technology products.
3. Outcomes Predicted-
It is expected that in the period of 5 years, the PLI scheme for automobile and auto components will result in new investment of over Rs 42,500 crore, an increase in production of over Rs 2.3 lakh crore, and the creation of over 7.5 lakh new jobs.
PLI SCHEME FOR DRONES
- The Union Government has approved this with an allocation of Rs 120 Crore over three financial years.
- It is a product-specific PLI Scheme.
- It will increase the domestic production of drones as well as bring new applications among various sectors.
PLI Scheme for the drones and drone components industry addresses the strategic, tactical, and operational uses of this revolutionary technology.
It is expected that in a period of 3 years, this will create an investment of ₹ 5,000 Crore, increase in eligible sales of ₹ 1500 crore and create additional employment of about 10,000 jobs.