The Ministry of Heavy Industries has extended the tenure of the Production Linked Incentive (PLI) scheme for automobile and auto components by one year with ‘partial amendments’ to the industry and guidelines of the scheme.

This decision has been made after receiving the approval of the Empowered Group of Secretaries (EGoS), as per an official statement.

“In pursuance of the approval of EGoS, the Ministry of Heavy Industries has made partial amendments in the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry and Guidelines of the Scheme,” as per the statement.

The total indicative incentive will now amount to Rs 25,938 crore, the Ministry stated.

As part of the amended rules, an approved applicant will be eligible for benefits for five consecutive financial years, but not beyond the financial year ending on March 31, 2028.

Furthermore, 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, the entity will still be eligible for benefits in the next year if it meets the threshold calculated based on 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 prefer to front-load their investments,” as per the communique.

The amendments are effective from financial year 2023-24, will be applicable for a total of five consecutive financial years, and are aimed to provide “clarity and flexibility to the scheme.”

The disbursement of the incentive will take place in the following financial year 2024-25.

These amendments to the PLI Scheme for the Automobile and Auto Component Industry and Guidelines of the Scheme are expected to provide greater clarity and support to the sector, promoting growth and competitiveness.