Government Extends PLI Scheme for Automobile and Auto Components Industry

In a significant move, the Ministry of Heavy Industries has announced the extension of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year, along with partial amendments to enhance its effectiveness. This decision was made after receiving the approval of the Empowered Group of Secretaries (EGoS), demonstrating the government's commitment to supporting the growth and competitiveness of the automotive industry in India.

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Key Amendments to the PLI Scheme

The Ministry of Heavy Industries has introduced several amendments to the PLI Scheme for the Automobile and Auto Component Industry, effective from the date of publication in the Official Gazette. These amendments aim to provide clarity and flexibility to the scheme, creating a more conducive environment for industry players.

One notable amendment is the extension of the incentive period to a total of five consecutive financial years, starting from the financial year 2023-24. This extension provides a longer timeframe for companies to avail the benefits of the scheme and plan their investments accordingly.

The disbursement of the incentive will now take place in the following financial year, ensuring a more streamlined process and timely support to the industry.

Eligibility and Threshold Requirements

Under the amended scheme, an approved applicant will be eligible for benefits for five consecutive financial years, but not beyond the financial year ending on March 31, 2028. This provision ensures that the benefits are distributed fairly and within a specified timeframe.

To maintain a level playing field, the amendments introduce a threshold requirement for an increase in Determined Sales Value over the first year's threshold. If an approved company fails to meet this threshold, it will not receive any incentive for that year. However, it will remain eligible for benefits in the next year if it meets the threshold calculated based on a 10% year-on-year growth over the first year's threshold. This provision encourages companies to make sustained investments and growth.

Revised Incentive Outlay

The amendments also include changes to the table indicating the incentive outlay, with the total indicative incentive amounting to Rs 25,938 crore. This revised outlay reflects the government's continued commitment to supporting the automotive industry and driving its growth.

The extension and amendments to the PLI Scheme for the Automobile and Auto Component Industry are significant steps taken by the Ministry of Heavy Industries to provide greater clarity, flexibility, and support to the sector. These measures are expected to promote growth, competitiveness, and innovation within the automotive industry, contributing to the overall economic development of India.