In a move aimed at fostering growth and competitiveness in the automotive sector, the Ministry of Heavy Industries has announced a one-year extension for the Production Linked Incentive (PLI) scheme for the automobile and auto components industry. The decision, approved by the Empowered Group of Secretaries (EGoS), comes with partial amendments to the industry and guidelines of the scheme.
The amended rules introduce several changes, including a total indicative incentive amount of Rs 25,938 crore. Approved applicants under the scheme will now be eligible for benefits for five consecutive financial years, up to the financial year ending on March 31, 2028. However, if an approved company fails to meet the threshold for an increase in Determined Sales Value over the first year’s threshold, it will not receive any incentive for that year.
To ensure fairness, the entity can still avail benefits in the subsequent year if it meets the threshold calculated based on a 10% year-on-year growth over the first year’s threshold. This provision aims to level the playing field for all approved companies and protect those opting to front-load their investments.
The amendments, effective from the financial year 2023-24, are designed to bring clarity and flexibility to the PLI scheme. The disbursement of incentives is set to take place in the financial year 2024-25.
These measures are anticipated to provide the much-needed support to the automobile and auto components industry, encouraging growth and competitiveness while establishing a transparent framework for industry participants.
