Cabinet may soon approve revised PLI scheme for auto sector

The government is believed to have slashed the outlay for the automobile sector under the production-linked incentive (PLI) scheme to about Rs 26,000 crore and the proposal is expected to be approved by the Union Cabinet soon, sources said. Last year, the government had announced a PLI scheme for the automobile and auto components sector with an outlay of Rs 57,043 crore, earmarked for five years.

The sources did not disclose the reason for revising the scheme to Rs 25,938 crore, but stated that the focus is now more on battery electric and hydrogen fuel cell vehicles.

The Cabinet may take up the proposal for consideration next week, one of the sources said.


Component segments which are expected to be covered under the scheme include automatic transmission assembly, electronic power steering system, sensors, super capacitors, sunroofs, adaptive front lighting, automatic braking, tyre pressure monitoring system, and collision warning system.

Auto industry body SIAM has earlier stated that the scheme announced by the government will increase competitiveness and take the growth of the sector to the next level.

The scheme for the sector is part of the overall production-linked incentives announced for 13 sectors in the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore.

The PLI scheme will help bring scale in key sectors and create and nurture global champions.