The Ministry of Heavy Industries announced on Monday that it will extend the duration of the Production-Linked Incentive (PLI) scheme for automobiles and auto parts by one year.
The move was made with the approval of the Empowered Group of Secretaries (EGoS). In response, the Ministry made some amendments to the PLI system.
Under the revised scheme, this incentive will be applicable for a total of five consecutive financial years starting from financial year 2023-24.
Incentive payments will be made in the next financial year 2024-25.
However, approved applicants will be eligible to receive benefits for five consecutive fiscal years beyond the fiscal year ending March 31, 2028.
The government said the amendments are expected to bring clarity and support to the sector and foster growth and competitiveness.
It also said that if an approved company does not meet the criteria for an increase in confirmed sales over the first year’s criteria, it will not receive any incentives for that year.
However, they said they would be eligible to receive benefits the following year if they met the criteria, which was calculated based on a 10% year-on-year increase over the first year’s criteria.
This provision is intended to ensure a level playing field for all approved companies and protect companies that wish to bring forward their investments.
The amendments also include changes to the table showing incentive expenditure, bringing the total incentive amount to Rs 25,938 crore.