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PLI Scheme Incentivizes Future Investments: Secretary, Heavy Industries
It would make India a top investment destination, said Arun Goel, Secretary, Ministry of Heavy Industries reacting to the Union Cabinet decision on Wednesday, (September 15, 2021) that cleared the Production Linked Incentive (PLI) scheme for the automobile sector aimed at augmenting India's capabilities in new technologies
Photo Credit : Reuters
Terming it as a scheme announced "at the right time" so as to attract the global players like Tesla to accelerate its India-entry plans, Secretary to the Ministry of Heavy Industries, Arun Goel said that the Production Linked Incentive (PLI) scheme would also incentivize high-value advanced automotive technology vehicles and products.
"This scheme does not in any way discourages the ICE technology. It just incentivizes the future investments," Goel said at a public event within a few hours after the Union Cabinet had cleared the PLI scheme for the automobile sector worth Rs 26,000 crore to boost the production of Electric Vehicles (EVs) and Hydrogen Fuel Vehicles.
The PLI scheme has a total outlay of Rs 26,058 crore for the next five years, with a share of Rs 25,938 crore for the auto industry and the auto component industry, and Rs 120 crore for the drone industry.
“This scheme does not in any way discourages the ICE technology. It just incentivizes future investments. This scheme does not exclude ICE (internal combustion engine) makers using advanced automotive technologies that could be powered by any fuel whether petrol, diesel ethanol, hybrid, or even CNG not only for domestic consumption but also for export markets," said Goel clarifying that the existing ICE manufacturers are eligible to take benefit of this scheme for the new technologies, which they will be adding to the ICE.
“India is the top investment destination after this. The scheme is also directed towards the automotive electronics industry. You have to see which way the world is moving and have to move with the times. The government is acting as a catalyst to make that transformation smoother and faster,” he added.
On reducing the funds for the scheme from Rs. 57,043 crore to Rs 25,938 crore now, Goel told a news agency that the ministry has identified the needs of the sector." What the Indian auto sector already has and what it needs to add. So, the government after stakeholder consultation with all the industry identified the additions required.”
Putting things in perspective Goel pointed that currently, India was exporting vehicles worth $12 billion and components worth $15 billion. However, India was also importing components worth $17 billion. "To reduce the import of components, the scheme will help those automotive companies which would fulfill the conditions of revenue and investment," he added.
Briefing the media about the Cabinet decision, Union Minister for Information and Broadcasting Anurag Thakur said the scheme for the automobile industry will lead to a fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.