The government today authorized a new production-linked incentive program (PLI) valued at around Rs 26,000 crore for the automotive sector to boost the production of electric vehicles and hydrogen vehicles. The PLI program will generate up to 7.5 lakh jobs for the automotive sector, according to government estimates.
Last year the government announced the program for the automotive and auto components sector with an expenditure of Rs 57,043 crore, for a period of five years. The Cabinet reduced the sector’s program to Rs 25,938 crore to focus on hydrogen and electric vehicles.
Automotive component segments covered by the PLI system include electronic power steering system, automatic transmission assembly, sensors, sunroofs, supercapacitors, adaptive front lighting, tire pressure monitoring system , automatic braking, tire pressure monitoring system and collision warning system.
The PLI program for the automotive sector is part of the overall production-related incentives announced for 13 sectors in the 2021-22 budget with an expenditure of Rs 1.97 lakh crore.
Earlier, the auto industry body, the Society of Indian Automobile Manufacturers (SIAM), said the PLI program would increase competitiveness and boost growth in the sector.
Meanwhile, shares of auto component makers rallied on Wednesday, September 15 after Cabinet approved the auto maker incentive program. Shares of auto axle maker Jamna Auto rose more than nine percent to an intraday high of 93.70, while Varroc Engineering was up 18 percent, GNA Axles was up three percent and Pricol was up five percent, among others.
In addition, the measure of auto stocks on the National Stock Exchange, the Nifty Auto Index, gained 0.5 percent after the PLI program was announced.