PLI scheme in TLI avatar, says Rajiv Bajaj

by Murali Gopalan 15 Sep 2021

Rajiv Bajaj, Managing Director of Bajaj Auto, minces no words when it comes to the Centre’s performance-linked incentive scheme announced on Wednesday. 

“The Government's PLI scheme in its new TLI (Technology Linked Incentive) avatar suggests that 18 months of dialogue with industry to enhance exports and hence employment is now history. That support has been now diverted fuel futuristic e-scooters like the Chetak — that are already entitled to a combined GST FAME and state subsidy of Rs 100,000/vehicle — as also other such advanced vehicles / technologies/components — to fulfil their great responsibility with even greater subsidy.”

From the Centre’s point of view, it is amply clear that it is keen on giving a huge push to new technology like electric and fuel cells. It is not as if the industry has any issues with it, especially when traditional ICE (internal combustion engine) players like Bajaj Auto and TVS Motor have moved to producing electric scooters like Chetak and iQube. 

It is clear from the MD’s reaction that auto manufacturers have been ahead of the curve already on new technologies over the years. The transition to Bharat Stage VI for instance involved substantial investments within a tight timeframe to meet the target. It was not an easy task for the entire automotive ecosystem comprising vehicle makers and ancillary suppliers at the backend coupled with dealers at the front end to handle this change in just three years.

In this backdrop, Bajaj is quite right in saying that automakers do understand their responsibilities and have constantly risen to the challenge. The concern perhaps is if the Centre can afford such generous fiscal sops to new energy options like electric forever when manufacturers would, on the contrary, welcome reinstatement of export incentives which were withdrawn last year.

The Centre’s push for electric, say industry sources, is not entirely surprising considering that it was only two years ago when its think tank, Niti Aayog, was keen on sub-150cc ICE motorcycles getting the boot by 2025 as part of its vision for an electric roadmap for the automotive industry. Industry leaders from the two-wheeler arena made their objections known and the idea was quickly shelved. 

Perhaps, the new PLI scheme is intended to reignite this plan. New entrants like Ola are perceived as the mobility disruptors but the fact remains that subsidies will play a big role in supporting the growth of electric scooters. How long the Centre and States can continue doing this is the million-dollar question. In this backdrop, leaders like Rajiv Bajaj have voiced their concerns on the PLI scheme especially at a time when governments are strapped for cash.

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