Updated January 2, 2024 10:21 IST
The Ministry of Heavy Industries said the total amount of indicative incentives amounted to Rs 25,938 crore.
Car factory | Image: Unsplash
The Ministry of Heavy Industries has extended the duration of the Production-Linked Incentive (PLI) scheme for automobiles and auto parts by one year with “some amendments” to industry and scheme guidelines.
According to an official statement, the decision was taken after receiving approval from the Empowered Group of Secretaries (EGoS).
“Following the EGoS approval, the Ministry of Heavy Industries has made some amendments to the Production-Linked Incentive (PLI) scheme and its guidelines for the automobile and auto parts industry,” the statement said.
The ministry said the total amount of indicative incentives amounts to Rs 25,938 crore.
As part of the revised regulations, approved applicants will be eligible to receive benefits for five consecutive fiscal years, but not for more than the fiscal year ending March 31, 2028.
Additionally, if an approved company does not meet the criteria for increased firm sales over the first year’s criteria, it will not receive any incentives for that year.
However, businesses are eligible to receive benefits in subsequent years as well if they meet a threshold calculated based on 10 percent year-on-year growth over the first year’s threshold.
This provision is aimed at ensuring a level playing field for all approved companies and protecting those “preferring to front-load their investments,” according to the communiqué.
The amendments will come into effect from financial year 2023-24, apply for a total of five consecutive financial years, and aim to provide “clarity and flexibility to the regime”.
Incentive payments will be made in the next financial year 2024-25.
These amendments to the PLI Scheme for the Automotive and Automotive Parts Industry and the Scheme’s Guidelines are expected to provide clarity and support to the sector and foster growth and competitiveness.