The Ministry of Heavy Industries recently announced a significant extension to the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry. This development follows the approval from the Empowered Group of Secretaries (EGoS) and was communicated via a Gazette Notification.
The Ministry has made several partial amendments to the PLI Scheme and its guidelines, introducing changes aimed at enhancing clarity and flexibility within the program. These amendments are effective immediately, as stated in the Official Gazette.
A key feature of the revised scheme is the extension of the incentive period to five consecutive financial years, beginning from 2023-24. The incentive disbursements are slated to commence in the following financial year, 2024-25. Under the amended guidelines, eligible applicants can receive benefits for five consecutive years, with the final year being the financial year ending March 31, 2028.
The amendments also introduce a performance-based clause. If a participating company fails to achieve the predetermined increase in Determined Sales Value in the first year, it will forfeit the incentive for that year. However, it can regain eligibility in the subsequent year by achieving a 10% year-on-year growth over the first year’s threshold. This modification is designed to promote fair competition among approved companies and protect those that have made significant upfront investments.
Additionally, the amendment revises the incentive outlay table, with the total indicative incentive now pegged at Rs. 25,938 crore.
These strategic changes to the PLI Scheme for the Automobile and Auto Component Industry are anticipated to bring enhanced clarity and support to the sector. The Ministry’s decision is seen as a step towards fostering growth and increasing the global competitiveness of the Indian automobile industry.
