Economic Survey 2024: Auto PLI schemes attract Rs 67k-crore investment, FAME-II and ACC battery storage policy to boost industry

Applicants have proposed employment generation of 1.48 lakh, against which 28,884 of jobs have been generated till March 31, 2024, the Economic Survey 2023-24 stated.

As per the Economic Survey 2023-24 tabled in Parliament, automobile and its allied sectors continue to be a critical enabler of the country’s economic growth. The survey highlighted that the production linked incentive scheme (PLI) for automobile and auto components has so far attracted a proposed investment of Rs 67,690 crore, against which Rs 14,043 crore has been invested till end-March 2024.

The Economic Survey highlights the substantial impact of the PLI scheme on the auto sector, showcasing the potential for continued growth and job creation.  Applicants have proposed employment generation of 1.48 lakh, against which 28,884 of jobs have been generated till March 31, 2024, as per the survey.

It is to be mentioned that the PLI Scheme for automobile and auto components has a budgetary outlay of Rs 25,938 crore from FY23 to FY27 and was sub-divided into champion OEM incentive scheme and component champion incentive scheme. So far, 85 applicants have got approval under the scheme, it noted.

The Indian automobile industry includes major global auto manufacturers across different categories, as well as an auto component industry that produces various auto parts, body and chassis, it informed.

“The growth in the value of domestic production and consumption of automotive parts moderated during FY20 to FY23, compared to the previous five years," the survey mentioned, adding, "The auto components sector closely follows the trends in automobile production."

The survey affirmed that the government’s support through budgetary allocations and approval of advanced technology programmes aims to drive further development in the industry. The survey also noted that other policies such as National Programme on Advanced Chemistry Cell (ACC) Battery Storage was approved in May 2021 with a budgetary outlay of Rs 18,100 Crore.

“The scheme envisages to enhance manufacturing capabilities of ACCs by setting up of Giga scale ACC and battery manufacturing facilities,” as mentioned in the survey.

It also mentioned about the phase II of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II), approved with an outlay of Rs 11,500 crore for five years during FY20 to FY24, spurred the sales of Electric Vehicles (EVs)

As per the survey, around 8,94,600 e-vehicles were incentivised during FY 2023-24, out of which 804,200 units were electric two-wheelers, 76,200 were electric three-wheelers, 12,400 units were E4Ws, and 1,900 units were e-buses.

The survey claimed that the automobile industry was helped by multiple government schemes in the fiscal year 2024 (FY24), during which the country produced around 49 lakh passenger vehicles, 9.9-lakh three-wheelers, 214.7-lakh two-wheelers, and 10.7-lakh commercial vehicles; the survey pointed out.