Govt revises incentives scheme for auto sector, extends it by 5 years
04 Jan 2024
The government has extended the tenure of the Production Linked Incentive (PLI) scheme for automobile and auto components by five years beginning the current financial year, ie, 2023-24.
The decision has received necessary approval from the Empowered Group of Secretaries (EGoS) and the amendments have been publication in the official gazette.
The ministry of heavy industries ministry has also made partial amendments to the PLI scheme and guidelines of the scheme in order to provide clarity and flexibility to the scheme.
Under the amended scheme, the incentive will be applicable for a total of five consecutive financial years, starting from the financial year 2023-24. The disbursement of the incentive will take place in the following financial year 2024-25. The benefits of the scheme will be made available for five consecutive financial years, but not beyond the financial year ending 31 March 2028, says an official release.
As per the amended scheme, 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. However, it will still be eligible for benefits in the next year if it meets the threshold calculated on the basis of a 10 per cent year-on-year growth over the first year's threshold. This provision aims to ensure a level playing field for all approved companies and safeguard those who preferred to front-load their investments.
The total indicative incentive under the amended scheme amounts to Rs25,938 crore.
The PLI scheme for the automobile and auto component industry and guidelines thereon are aimed at providing necessary support for promoting growth and competitiveness of the sector, says the release.