Component Champions Incentive Scheme

In line with the Union Budget 2021-22 announcement, the Government of India approved the PLI scheme for the automobile and auto components industry. Ashish Bhatia visits the fine print to gauge the industry sentiment.

- Ashish Bhatia

In the Union Budget 2021-2022, under the Production Linked Incentive (PLI) scheme, Rs.1.97 Lakh crore was allocated for creating “global manufacturing champions” across 13 sectors including industries and services. Back then, the PLI scheme was expected to help the Indian auto industry to improve production efficiency and become self-reliant or ‘AtmaNirbhar’. The allocation of Rs.57,042 crore by the Union Cabinet with the Department of Heavy Industries as the implementing ministry was looked at as a step in the right direction. One that would help the industry generate employment and boost economic growth.

The recognition of the manufacturing sector as an integral part of the global supply chain was well received as a boost to the industry. On one hand, it was looked at as a development with the potential of encouraging global manufacturing firms while on the other hand, the scheme was expected to provide incentives for local manufacturing firms to expand. On the whole, the government set out to attract investment in the areas of core competency and cutting-edge technology, ensure efficiencies, create economies of scale, enhance exports and make India an integral part of the global supply chain. Averred Sunjay Kapur, President, ACMA and Chairman at Sona Comstar, “Thrust on incentivising new-age technologies will facilitate the creation of a state-of-the-art automotive value chain in the country and give a much-needed impetus to the manufacturing of cutting edge automotive products in India.”

The fine print