Govt To Extend Rs 26,000 Cr Product-Linked Incentive Scheme For Auto Industry By A Year

Zero Emission Technology Programme: Amid the growing demands from the automotive industry, the government on Tuesday said that it will extend the zero-emission technology programme by another year and also decided to bring amendments to the Rs 26,000 crore production-linked incentive (PLI) scheme, in accordance to the demands of the auto industry.

According to a report by the Times of India, Heavy Industries Minister, Mahendra Nath Pandey, has said that the government is open to considering changes to the PLI scheme in line with industry demands, which includes the proposal to distribute PLI incentives on a quarterly basis instead of the current annual payments.

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"We are confident that the PLI scheme will not only provide incentives to the companies, but will also help in creating new investments, scale, skills, technological advancements, and jobs in the Indian auto sector. We are ready to consider certain demands raised by the companies on the matter," Mahendra Nath Pandey said, as quoted by the Times of India.

Nath further stated that the government is planning to increase the number of agencies evaluating domestic value addition (DVA) from two to four in order to increase the PLI scheme's efficacy. These new agencies would be set up in Chennai and Indore. The auto PLI system makes it mandatory for companies to guarantee that at least 50% of the value added in production is domestic.

Companies had already made sizable contributions to the PLI scheme, surpassing the planned target of Rs 43,500 crore with contributions totalling Rs 67,690 crore. Major automakers including Mahindra, Tata Motors, Hyundai, Toyota Kirloskar, Ola Electric and Ashok Leyland are among the program's beneficiaries.

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What is the Zero-Emission Tech Program all about?

The zero-emission technology programme which was originally a five-year plan, and was planned to run from 2022–2023 to 2026–2027, will now be extended. The years 2027–28 will also be included under the extension. As of April 1, 2022, incentives are applicable for certain sales of Advanced Automotive Technology (AAT) items, including automobiles and their components, made in India.