The government today said it has amended the production-linked incentive scheme for automobile and auto components to extend the scheme’s tenure by one year to March 31, 2028.
The Rs 25,938 crore output-linked incentive scheme aims to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Initially, the incentives were applicable on determined sales value from the financial year 2022-2023 for a total of five consecutive financial years till 2026-2027.
As per the amended scheme, the incentives will be applicable for a total of five consecutive financial years from 2023-2024 and 2027-2028. The disbursement of incentives will start in the financial year 2024-2025.
The scheme has two components – the Champion OEM incentive scheme for battery electric and hydrogen fuel cell vehicles, and the component champion incentive scheme for hi-tech and hi-value components. The incentives are given for the production of products with a minimum domestic value addition of 50%.
The government has approved 18 companies including Maruti Suzuki, Tata Motors, Hero MotoCorp, Bajaj Auto and Ola Electric, under the Champion OEM category and 67 companies under the Component Champion category of the scheme.
The amendments also note that 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 get any incentive for that year. “However, the company would be eligible for benefits in the next year if it meets the threshold calculated based on a 10% year-on-year growth over the first year's threshold,” the Ministry of Heavy Industries said.