The Production Linked Incentive scheme for the auto sector is all set to be announced next week. Sources tell CNBC TV18, that the scheme which has been under works for nine months, is likely to be approved in the next cabinet meeting. However, the PLI scheme which covers both vehicle manufacturers and component makers has been significantly changed.
Sources have told CNBC-TV18, that the Department of Heavy Industries has modified the scheme to promote new technologies. The revised draft could include adoption of new technologies, as one of the conditions for availing incentives under the scheme. This is in line with the government's major push towards electrical vehicles, green hydrogen and alternate fuel vehicles.
The initial draft of the PLI scheme incorporated four schemes to boost automotive exports. These included a global sourcing, vehicle champion scheme, component champion scheme and. Vehicle makers and component manufacturers were likely to receive a cashback between 2 percent and 12 percent on incremental sales and exports revenue. But, the final draft which has now been approved could have a different framework to also make the scheme more compliant with WTO norms.
Sources have also told CNBC TV18, that instead of announcing the total outlay of 57000 crores, the government could first announce an initial allocation of approximately 30000 crores.
CNBC-TV18 also reached out to a spokesperson for the Ministry of Heavy Industries. "No decision has been taken as yet. Matter is still under consideration. Premature speculation may please be avoided", said the official.
Automotive industry veteran and Head of the Commerce Ministry's Scale Committee, Pawan Goenka said the industry was eagerly waiting for the scheme.
"Automotive PLI scheme is rumoured to be announced on Wednesday. The industry is eagerly waiting for it. This will be the largest direct incentive to the Auto industry by GOI ever. I am sure the scheme will do wonders for boosting exports and increasing local value addition", he said.