Govt to start giving PLI incentives for auto cos in FY25
New Delhi: The government will start crediting incentives under the ₹26,000 crore production-linked incentive scheme for automobiles and auto components from the next fiscal year, Union minister for heavy industries Mahendra Nath Pandey said in a written reply to Parliament on Tuesday. Mint had previously reported that automakers were skeptical about being able to complete the process to claim incentives under the scheme within this year. The scheme was first notified in 2021.
While the announcement comes along expected lines, and provides certainty to the scheme’s 67 autoparts-making applicants, the delay in disbursement of incentives could be viewed as a setback for homegrown automakers Tata Motors and Mahindra & Mahindra, which have received DVA (domestic value addition) certifications from the government for electric vehicles in the commercial and passenger vehicle space. Sales of electric passenger vehicles have been flattening over the last few months, prompting discounts by leading original equipment manufacturers (OEMs). The government, however, expects sales of one lakh electric passenger vehicles this fiscal year to 31 March, 2024.
Out of the 67 automotive component makers and 18 OEMs that have been selected as beneficiaries of the scheme, only Tata Motors and M&M have received localization certifications from the government-run testing agency ARAI (Automotive Research Association of India) for a range of products with electric powertrains.
The incentives will be awarded against evidence of actual sales and audits of the investment made in advanced automotive technologies. A large number of companies have been unable to submit the necessary documentation, required to be signed off by statutory auditors, in time to become eligible for certifications because of complexities in the application process.
“We expect more companies to receive DVA certifications soon,” Hanif Qureshi, joint secretary, ministry of heavy industries, said.
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Published: 19 Dec 2023, 10:26 PM IST
