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Below is quote on PLI scheme announce by Mr. Santosh Meena, Head of Research, Swastika Investmart Ltd

The Finance Ministry in the budget has announced the PLI scheme for three sectors. In today’s cabinet meeting the government has approved the PLI scheme for the auto sector to promote domestic manufacturing and create job opportunities. The cabinet approved incentives worth ₹26,058 crores to be provided to the industry over five years to promote the automotive technology and ₹120 crores will be provided to the drone industry over three financial years.

Under the auto component PLI scheme, a total of 22 components will be covered such as Battery Electric Vehicles, Hydrogen Fuel Cell Vehicles, Advanced Automotive Technology, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors, etc.  However, the scheme does not cover the conventional automotive makers and would focus on advanced automotive technologies. Stocks such as Jamna Auto, Varroc Engineering, GNA Axles, Pricol, Sona BLW, Motherson Sumi, and Minda Industries are likely to be the beneficiaries.

The scheme looks to be a welcome move by the government as the electric vehicles and alternate fuel vehicle is likely to be eco friendly whereas, advanced technologies will enhance the safety and customer experience.

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