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PLI for autos: M&M's Pawan Goenka raises concerns on components side

Updated : March 08, 2021 09:38 PM IST

The government is finalising the contours of the production-linked incentive (PLI) scheme for the auto sector. Sources told CNBC-TV18 that the scheme will comprise of four sub schemes and companies can apply for a maximum of three.

Other than that the eligibility criteria for vehicle manufacturers has been set at Rs 10,000 crore in global revenue and Rs 1,000 crore in exports. For auto component manufacturers the criteria stands at Rs 1,000 crore in global turnover and Rs 200 crore in annual exports.

Specifically for components, the industry feels that this criteria would mean only 25 to 30 companies would qualify.

The industry has recommended that the criteria be diluted to Rs 500 crore in global turnover and Rs 100 crore in annual exports. This move will allow 70 to 80 companies to qualify. The industry has also recommended that the scheme should not cannibalise existing exporters by incentivising new ones.

Pawan Goenka, MD of M&M in conversation with CNBC-TV18's Parikshit Luthra said, "Right now the concern that the industry has is only on the component side, the auto OEM side appears to be quite reasonable. What is more important is what the scheme will do, how it is going to grow the Indian automotive industry and make it truly global and what kind of opportunities do we see in this scheme. That is what we are focused on. There is no misalignment or no difference of opinion between government of India and the industry."

"Many players in the industry - both component and OEMs have invested significant amount of money over the last several years. What we are saying is, let us try and make sure that these players become bigger and get scaled rather than these players being side-lined and new players coming in. So I don't think there is any sort of difference from the intent in both of these statements that were made on Friday by our representatives from SIAM and ACMA," he said.

"This scheme has been developed in close cooperation with the industry and we have been discussing it with Niti Aayog as far back as May-June of last year. So there cannot be any difference in the thinking or approach that industry sees and that the government sees," he added.

For more, watch the video.
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