Informist, Monday, Jan. 6, 2025

NEW DELHI – The government Monday launched a second round of production-linked incentive scheme for five specialty steel products--coated or plated, high strength or wear resistant, rails, alloys and wires, and electrical. The scheme, called 1.1 and a revised version of the first round that was launched in July 2021, will remain open till Jan 31. The portal for the new scheme opened Monday.

The scheme will operate within the fund amount of INR 63.22 billion, originally allocated for the scheme when the first round was launched, and will be applicable to production from 2025-26 (Apr-Mar) to FY30. The steel ministry said it has paid only around INR 20 bln incentive to the companies that participated in the first round. In the first round, of the INR 271.06 billion worth of committed investment by 26 companies for 44 projects, the actual investment achieved is around INR 183 billion.

The conditions to claim incentives in the 1.1 version of the scheme for specialty steel production have been diluted by the steel ministry. Not all companies would need to install new mills as those investing in augmenting existing capacities will be allowed to participate in the scheme, the ministry said. Further, companies will be permitted to carry forward excess production to the immediate following year and still receive incentives if the following year's standalone production does not meet the annual target.

The revised version of the scheme has also lowered the investment threshold to INR 30 bln and capacity creation threshold to 50,000 tn for cold-rolled grain-oriented steel, a high-value steel used in production of power transformers used in high transmission power distribution. The ministry hopes that this will incentivise companies to invest in technology to make this important steel product since it is currently "not available with any of the Indian steelmakers." End

Reported by Rajesh Gajra

Edited by Deepshikha Bhardwaj

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