Rs 25,938 crore: Extension of PLI Scheme for Automobile and Auto Components by one year!
Boosting Auto Industry Growth: India's PLI Scheme Extended with Strategic Amendments
In a move to bolster the automotive and auto components sector, the Ministry of Heavy Industries recently announced the extension of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by an additional year. This decision, approved by the Empowered Group of Secretaries (EGoS), is accompanied by strategic amendments aimed at enhancing clarity and flexibility within the scheme.
The Gazette Notification issued by the Ministry outlines key modifications to the PLI Scheme, effective upon publication. Under the revised framework, the incentive will now span five consecutive financial years, commencing from 2023-24, with disbursement occurring in the subsequent financial year, 2024-25. Notably, approved applicants will be eligible for benefits for a maximum of five consecutive financial years, up to the financial year ending on March 31, 2028.
A significant addition to the amended scheme addresses the performance thresholds for companies seeking incentives. If an approved company fails to meet the threshold for an increase in Determined Sales Value compared to the first year, it will not receive any incentive for that specific year. However, the company remains eligible for benefits in the following year if it achieves the threshold, calculated based on a 10 per cent year-on-year growth over the initial year's benchmark. This provision aims to ensure fairness among approved companies, safeguarding those who choose to front-load their investments.
The amendments also include revisions to the incentive outlay table, with the total indicative incentive amounting to a substantial Rs. 25,938 crore. This financial boost is expected to provide a significant impetus to companies operating within the automotive and auto components sector.
By extending the PLI Scheme and introducing these amendments, the Ministry of Heavy Industries aims to provide greater clarity and support to the sector, fostering growth and competitiveness. The move aligns with the government's commitment to promoting a thriving and dynamic automotive industry in India. As the automotive landscape continues to evolve, these strategic measures are poised to contribute to the sector's resilience and drive innovation, ensuring a robust future for the Indian automotive and auto components industry.