Business Desk, ETV Bharat: India’s automobile sector on Wednesday received a major booster dose from the Union Government as the Finance Minister announced that the Cabinet has given its nod to bring the automobile sector under the Performance Linked Incentive Scheme (PLI).
“The automotive industry is a major economic contributor in India. The PLI scheme will make the Indian automotive industry more competitive and will enhance globalization of the Indian automotive sector,” said a press release.
It added: “The PLI scheme is applicable to both automobiles and auto components with a financial outlay of Rs 57,042 crore over a five-year period.”
Talking to ETV Bharat, Vinkesh Gulati, president of Federation of Automobile Dealers Associations of India (FADA), said: “The move will improve automobile exports from India and will make the production better in economies of scale.”
For the sector reeling under severe financial stress due to low sales since last year, the latest move is seen as a ray of hope by the industry experts.
To recall, automobile sales fell to a two-decade low in 2019.
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As per the Society of Indian Automobile Manufacturers (SIAM) data, sales across the automobile sector fell 13.77% to 2.30 crore units in 2019 on a year-on-year basis.
However, the ongoing Dussehra-Diwali festive season has brought some cheer to the sector.
As per the data released by SIAM on Wednesday, passenger vehicles sales were up by 14.19% in October compared to a year ago period.
Besides, allocation of Rs 18,100 crore to the Advance Chemistry Cell (ACC) Battery sector under the PLI Scheme is expected to further boost the prospects of the electric vehicle segment.
“ACC battery manufacturing represents one of the largest economic opportunities of the twenty-first century for several global growth sectors, such as consumer electronics, electric vehicles, and renewable energy,” said the government release.
