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Informist, Tuesday, Sep 10, 2024

 

By Krity Ambey

 

NEW DELHI – The government expects to disburse at least 30 bln rupees to automobile companies under the production-linked incentive scheme in the current financial year ending March, an official from the heavy industries ministry said today. The government has allocated 35 bln rupees for the production-linked incentive scheme for the automobile sector in 2024-25.

 

"We did not receive any requests for claims in Q1 (Apr-Jun), but there should be some in the last quarter (Jan-Mar)," the official told Informist. The government disburses funds at the end of each quarter under the production-linked incentive schemes operational in 14 sectors.

 

The government announced the production-linked incentive scheme for the automobile sector in September 2021 with a total outlay of 259.38 bln rupees for five years, but later extended the scheme for one more year till 2027-28. There has been no disbursal under the scheme so far. 

 

The gestation period of the scheme was initially set to end in 2022-23, and disbursal was supposed to begin from 2023-24. However, after the extension of the scheme, the gestation period was also extended by a year, the official said. "We have given another year's time to the companies and also amended the criteria for subsidy eligibility," the official said. "From here on, the trajectory should only be upwards."   

 

Under the production-linked incentive schemes, the government usually offers benefits to companies for incremental sales of products manufactured in India over the year when the scheme for the sector was announced. The norm was slightly relaxed for automobile companies. If automobile companies fail to meet the eligibility threshold in the first year, they can claim incentives next year, provided they meet the threshold calculated based on a 10% year-on-year growth over the first year's threshold. 

 

The government is also likely to roll out the third phase of the Faster Adoption and Manufacturing of Electric Vehicles or FAME-III scheme in January, the official said. The second phase of the scheme ended on Mar 31. 

 

On Monday, Heavy Industries Minister H.D. Kumaraswamy said that the government will run the Electric Mobility Promotion Scheme 2024 till the government implements the third phase of the Faster Adoption and Manufacturing of Electric Vehicles scheme. 

 

Both schemes aim to incentivise people to adopt electric vehicles. Under the scheme, consumers can purchase electric vehicles at a discounted price from manufacturers and the government will reimburse the difference to the manufacturers.  End  

 

Edited by Saji George Titus

 

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