Cabinet approves Rs 26,058 crore PLI scheme for auto, auto-components, drones; 100% FDI in telecom

Union Minister Anurag Thakur on Wednesday said the Union Cabinet has approved production-linked incentives (PLI) scheme for auto vehicles, components, and drones to enhance their competitiveness. Thakur said the total outlay of the PLI scheme is Rs 26,058 crore, out of which Rs 120 crore is to be allocated for the drone PLI scheme.

Under this scheme, the auto sector will generate employment opportunities for over 7 lakh people, the minister said in a briefing after the Cabinet meet.

Thakur said India's share in the global auto sector is 2 percent and there is a need to increase it. The PLI scheme has been brought to push advanced automotive technologies. "Automobile industry contributes to 35 percent of the manufacturing GDP of the country. It is a leading sector in generating employment. If we speak of the global automotive trade, then we need to increase India's participation," added Thakur.

To the drone industry, the Union Minister said the government has given incentives worth Rs 120 crore. The drone industry will receive exceptional treatment, Thakur said, adding that the drone manufacturing PLI will ensure a 20

percent incentive over 5 years. An investment of Rs 5,000 crore is expected in 3 years for drone manufacturing, the minister said.

Thakur mentioned that incentives under the auto PLI scheme will range from 8-13 percent and 5 percent additional incentives for electric and hydrogen fuel cell vehicles.

The Cabinet has approved reforms for the telecom sector too -- nine structural reforms and five process reforms. AGR definition has been rationalised to exclude non-telecom revenues prospectively and a 4-year moratorium on telecom dues approved as well, said Telecom Minister Ashwini Vaishnaw.

The Cabinet has decided to allow 100 percent FDI in telecom under automatic route. Also, spectrum user charges will be rationalised. There will now be an annual compounding of rates. Spectrum can now be surrendered and can also be shared, Vaishnaw added.

Vaishnaw said for future auctions, the duration of the spectrum will be 30 years instead of 20 years. "Also if someone takes spectrum and business conditions/technology changes then after a lock-in period of 10 years, it can be surrendered by paying spectrum charge," the minister mentioned.