The Union Ministry of Heavy Industries announced on Monday the extension of the tenure of the Production Linked Incentive (PLI) scheme for the automobile and auto components sectors by one year. The decision, approved by the Empowered Group of Secretaries (EGoS), was communicated through a gazette notification.
The ministry introduced partial amendments to the PLI scheme, effective from the date of publication in the Official Gazette, with the intention of enhancing clarity and flexibility. The amended scheme will now be applicable for five consecutive financial years, commencing from the financial year 2023-24, and the incentive disbursement will occur in the subsequent financial year, 2024-25.
According to the revised scheme, approved applicants will be eligible for benefits for a maximum of five consecutive financial years, not extending beyond the financial year ending on March 31, 2028.
In addition, the amendments outline that 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 incentives for that year.
However, eligibility for benefits in the following year is retained if the company achieves the threshold based on a 10 per cent year-on-year growth over the initial year’s threshold.
This provision aims to ensure fairness among approved companies and safeguard those that opted for front-loading their investments. The amendment also includes changes to the incentive outlay table, with the total indicative incentive amount set at Rs 25,938 crore.
The Union Ministry of Heavy Industries anticipates that these modifications to the PLI scheme for the automobile and auto component industry, along with the updated guidelines, will offer increased clarity and support to the sector. This is expected to stimulate growth and enhance competitiveness, according to the ministry’s statement.
