New Delhi, Sep 15 (IANS): Centre on Wednesday approved a PLI scheme for the promotion of renewable and environment friendly automobiles such as EVs, sources said.

Accordingly, the over Rs 25,000 crore scheme is likely to boost production of components as well as give a push to the nascent sector.

In financial parlance, a PLI scheme provides incentives to the industry for boosting domestic production to lessen imports.

Earlier, an outlay of Rs 1.97 lakh crore was made for PLI scheme spanning 13 sectors in budget 2021-22.

"While the scheme is incentivizing the manufacturing in the vehicle and component space, the industry awaits similar policy measures to promote the manufacturing of goods required for setting up the infrastructure required for charging such vehicles," said Saurabh Agarwal, Tax Partner, Automotive sector, EY India.

"The beneficiaries in the PLI scheme for auto sector are likely to be 10 vehicle manufacturers, 50 auto-component manufactures and 5 new non-automotive investors planning to enter into the automotive sector. With the limited budget of Rs 26,000 Crore approx. likely the industry will see a tough competition with respect to award of the PLI scheme."