For auto companies and auto component manufacturing companies, the government has announced to extend the Production Linked Incentive (PLI) Scheme of Rs 25,938 crore for one year, although this time some changes have been made in the guidelines.
Benefit of PLI scheme will be available with some changes
After the approval from the Empowered Group of Secretaries (EGoS), the Ministry of Heavy Industries decided to expand this scheme. This scheme, brought after some changes, is applicable from the financial year 2023-24, under this the auto industry will get the benefit of this scheme for a total of five consecutive financial years.
After extending this PLI scheme by one year, this five-year scheme, which was originally from 2022-23 to 2026-27, will now continue till 2027-28.
What are those changes?
Disbursement of incentives will take place in the next financial year 2024-25. Under this scheme, an approved applicant i.e. auto company can avail the benefit of this scheme for five consecutive financial years, but not more than after the financial year ending March 31, 2028.
Additionally, the changed guidelines of the scheme state that if an approved company fails to meet the prescribed sales value increase limit during the first year, it will not get any incentive for that year. However, the company will still be eligible for benefits for the next year if it achieves the 10% annual growth limit in the first year in the next year. The purpose of this provision is to provide a level playing field to all companies and to protect those who want to make profits from their investments.
More transparency, development will be supported
The ministry said, ‘The amendment also includes changes in the table showing incentive expenses, in which the total indicative incentive amount is Rs 25,938 crore.’
It said that these amendments in the PLI scheme and its guidelines for the automobile and auto component industry are expected to provide more transparency and support to the sector, promoting growth and competition.