Cabinet approves Rs 26,000 crore project for Auto Sector

Hyderabad:  The government on Thursday cleared  Rs 26, 000 crore under production-linked incentive scheme for the auto sector. The grant will boost production of electric and hydrogen fueled vehicles.

On Wednesday, the central government approved Rs 26,000 crore as part of the production-linked incentive scheme, which is said to benefit the auto sector through increased production of electric and hydrogen fueled vehicles.

The production-linked incentive (PLI) scheme is touted to generate about 7.5 lakh jobs in the auto sector, as estimated by the government.

In 2020, the government had pronounced the scheme for the developments in the automobile and auto component industries, which consisted of an outlay worth Rs 57,043 crore for a five year period. As per the latest announcement the cabinet has reduced the amount of money in the scheme for the sector to Rs 25,938 crore, since emphasis is laid on hydrogen fueled and electric vehicles.

The PLI covers certain parts of the auto component including the automatic transmission assembly, sensors, tyre pressure monitoring system and sunroofs to name a few. The PLI scheme  for the auto sector is part of the over-all production-linked incentive schemes announced for 13 sectors in the 2021-22 budget ,it consists of an outlay worth Rs 1.97 lakh  crore.

According to the Society of Indian Automobile Manufacturers , an auto industry body, the PLI scheme would enhance competition among automobile firms and provide leverage to the sector as reported by  NDTV.

After the announcement regarding the PLI, the auto component sector experienced a rise in the share market. The automotive axel maker, Jamna Auto saw a growth of more than 9% as it experienced a high of Rs 93.7, while the GNA axel saw a growth by three percent.

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