PLI Auto Scheme Disburses ₹2,000 Crore to Key Auto Manufacturers: Report

The government has distributed incentives totalling almost ₹2,000 crore to leading automobile manufacturers during the current financial year under its production-linked incentive scheme for the automotive sector, according to a senior ministry official, The Economic Times has reported. Hanif Qureshi, Additional Secretary at the Ministry of Heavy Industries, was quoted as saying on Wednesday that Tata Motors, Bajaj Auto, Mahindra & Mahindra, TVS Motor, and Ola Electric have received the disbursements in FY26 based on their performance during FY25 under the PLI-Auto scheme.

The official also indicated that component manufacturers including Delphi-TVS, Bosch Automotive, Sona BLW, and Tata Autocomp are set to receive government incentives during the remainder of the financial year.

Scheme Progress

The production-linked incentive scheme for automobiles marked FY24 as its inaugural performance year, with ₹322 crore distributed to four applicants during FY25. The government granted approval for the programme in September 2021, with incentives awarded for achieving targets related to incremental production, investment commitments, and domestic value addition from FY24 onwards.

By September, companies participating in the scheme had invested ₹35,657 crore in total, compared to the five-year projection of ₹42,500 crore.

"Bulk investment has been made and now sales will pick up," Qureshi was quoted as saying.

The initiative operates with a total budgetary allocation of ₹25,938 crore covering a five-year performance period commencing from FY24.

Non-Performing Firms Face Penalty

The government is considering invoking bank guarantees from 10 companies that have failed to make any investments under the scheme thus far, the Additional Secretary revealed. Whilst 82 companies -- comprising vehicle manufacturers and spare parts producers -- received approval to claim incentives under the programme, the ministry declined to identify the non-performing entities.

EV Adoption Gains Momentum

Under the PM Electric Drive Revolution in Innovation Vehicle Enhancement (PM E-DRIVE) scheme, sales have reached 2.124 million vehicles, according to ministry data.

The ministry noted that electric vehicle adoption within the three-wheeler (L-5) category is currently estimated at 32 per cent.