Centre may seek details on missing auto PLI claims
Agencies
Auto PLI scheme (Image for representation)
Synopsis
The Centre is set to investigate why many beneficiaries of the ₹25,938 crore PLI-Auto scheme haven't claimed incentives despite approvals. Launched in September 2021, the scheme aims to boost domestic auto manufacturing through incremental production and local value addition. Supply chain issues are cited as a hurdle.
The Centre is likely to call for information from around 50 beneficiaries of the Production-Linked Incentive scheme for the automobile and auto component industry (PLI-Auto scheme) who are yet to submit any incentive claims in the last two years despite having the requisite approvals, officials said.
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The step is a part of a larger review of the scheme, for ascertaining reasons behind its faltering, they said, adding just a third of the more than 80 intended beneficiaries have raised claims so far.
"We are trying to figure out what changed since the scheme launched," a senior official told ET. Some intended beneficiaries have cited supply chain constraints as a reason for not meeting the scheme goals, according to people aware of the development.
The PLI-Auto scheme was approved in September 2021 with a ₹25,938 crore budgetary outlay. Incentives were to be disbursed for meeting incremental production, investment, and domestic value addition (DVA) goals, among others from 2023-24 onwards.
"There are very stringent DVA criteria under PLI-Auto...A techno-commercial audit is in-built to ensure localisation," one of the officials said, emphasising that several large original equipment manufacturers (OEMs), who have complied with the scheme's goals and received incentives, are reporting that a domestic component industry is developing due to this strict mandate.
"Beneficiaries are supposed to ensure Tier two, three, and four suppliers comply with domestic manufacturing," the official said.
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Five OEMs have raised claims totalling more than ₹2,000 crore for achieving the scheme's goals in FY25. Officials said claims worth Rs 322 crore have been released so far for the scheme's goals achieved in FY24.
A decision to figure out the root cause of PLI-Auto not living up to expectations was taken during a review of the scheme by the Ministry of Heavy Industries (MHI) last week. The scheme has attracted domestic investments worth ₹29,576 crore until March 2025. It was also decided that MHI will handhold applicants on operational aspects such as claims and DVA compliance.
