Auto production incentive schemes helped create over 30,000 jobs, says heavy industries minister Kumaraswamy

New Delhi: Production-linked incentive schemes for automobiles and automotive components (PLI-Auto) have helped to create more than 30,000 jobs, Union heavy industries minister H D Kumaraswamy said, highlighting the sector's potential to generate employment.

Proposed investments in the PLI-Auto scheme, which exceed ₹75,000 crore, have led to the creation of 30,502 jobs till March 2024, the minister said at the Society of Indian Automobile Manufacturers (SIAM) convention in the national capital on Tuesday.

To be sure, the minister said only ₹17,896 crore has been actually invested in the PLI-Auto scheme till March 2024.

The PLI-Auto scheme was started in 2021 with an outlay of over ₹25,000 crore to boost local manufacture of automobiles and automotive components and make India self-reliant. The minister's statement shed light on the sector’s potential in job creation, a key theme of this year’s budget.

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The government is aiding the sector’s supply side with PLI schemes for automobiles, auto components and advanced chemistry cells, Kumaraswamy said.

The PLI for advanced chemistry cells, which was announced in 2021 with an outlay of over ₹18,000 crore, is aimed at developing 50 GWh (gigawatt-hours) of battery storage locally. The government has already allotted incentives to produce 30 GWh.

Electric vehicles

The government is also focusing on adding charging infrastructure to the electric vehicle ecosystem.

"While developing the charging infrastructure, we are conscious that integrating this infrastructure with renewable energy sources is essential for maximising the environmental benefits of electric mobility," he said.

Kumaraswamy lauded the Scheme to Promote Manufacturing of Electric Passenger Cars in India, which allows investing companies to import CBUs of electric four-wheelers manufactured by them at a reduced customs duty of 15% instead of 70% or 100% that is levied.

Also Read: FAME slows down, auto PLI in fast lane

To avail of the concessional import duty, companies must invest at least ₹4,150 crore to make four-wheeler EVs in India. They must also achieve 50% localisation within five years of getting approval for investments. The scheme was notified in March.

The ministry’s subsidy schemes for electric vehicles have catered to demand for green energy-powered vehicles, Kumaraswamy said. The government announced the second iteration of the Faster Adoption and Manufacturing of Electric (and Hybrid) vehicles (FAME) scheme with an outlay of ₹11,500 crore to provide EVs at subsidised prices to consumers, the minister said.

After FAME-II lapsed in March, the government notified a short-term replacement Electric Mobility Promotion Scheme (EMPS), on which it has spent over ₹1,200 crore. The EMPS focuses on pushing adoption of two- and three-wheeler EVs. A day earlier, Kumaraswamy said the EMPS, which was set to lapse by the end of September, would continue until the next phase of FAME is notified.

"EV subsidies will continue," he said on Monday.

Also Read: Electric vehicles don’t need subsidies now, says transport minister Nitin Gadkari