PLI will drive auto business to create 7.5 lakh jobs in next five years: Arun Goel

The Production Linked Incentives Scheme for the automobile and auto components sector will lead to the creation of 7.5 lakh additional jobs and incremental production worth Rs 2,31,500 crore over the next five years, a top official said on Monday.

Ford, Tata Motors, Suzuki, Hyundai, Kia and Mahindra & Mahindra are among the 20 companies that will be eligible for receiving incentives under the Production Linked Incentives (PLI) Scheme for the automobile and auto components sector, it was reported recently.

“The 20 companies we selected have committed an investment of more than Rs 45,000 crore. So as per our scheme target, our scheme is of Rs 25,938 crore, so we expect this will lead to incremental production of Rs 2,31,500 crore,” Arun Goel, Secretary in the Heavy Industry Ministry, said.

Highlighting that the scheme gives incentives only on such products which are presently not being made in India, Goel said therefore the incremental production figure implies we would have otherwise imported products to the tune of Rs 2,31,500 crore, thereby strengthening the government’s vision of Aatmanirbhar Bharat. The Secretary said the emphasis on ‘Made in India’ comes with the condition that at least 50 per cent of the value addition must be carried out domestically, by going up to Tier 3, which includes the micro, small and medium enterprises.

“So, if somebody is importing cars from outside India and just screwing them up here, assembling them, he will not get benefits under the scheme. He has to produce at least 50 per cent in India in terms of value addition,” Goel said. Consequently, MSMEs’ revenues will increase leading to job creation, he said noting “So we are estimating 7.5 lakh additional jobs to be created in India as a result of this scheme in the next five years.”