New Delhi, Mar 12 (KNN) The Department-Related Parliamentary Standing Committee on Industry (Rajya Sabha), chaired by Tiruchi Siva, presented its 332nd Report on the Demands for Grants (2026–27) in Parliament on Wednesday, covering the Ministry of Heavy Industries (MHI) budget and key schemes across the automotive industry, capital goods sector, and central public sector enterprises (CPSEs) and autonomous bodies.
The committee flagged a funding shortfall in the allocation for the MHI and called for stronger measures to accelerate EV adoption, boost domestic manufacturing and improve monitoring of key industry schemes.
It noted that the Budget Estimate (BE) for 2026–27 is Rs 7,939.9 crore, against a projected requirement of Rs 9,484.32 crore, indicating a 16 per cent shortfall.
Revenue expenditure accounts for 99.96 per cent (Rs 7,937.08 crore) of the outlay, while capital expenditure has fallen to Rs 2.82 crore, from Rs 502 crore in BE 2025–26.
The panel also flagged declining utilisation—84.23 per cent (2022–23), 76.87 per cent (2023–24) and 58.9 per cent (2024–25)—and recommended realistic budgeting, higher capital investment and better coordination with the Ministry of Finance.
EV Adoption and Scheme Implementation
Under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme (Rs 10,900 crore, 2024–2028), 16.56 lakh EVs have been incentivised against a 28.26 lakh target (58.6 per cent).
Adoption is concentrated in electric two-wheelers (14.31 lakh) and electric three-wheelers L5 (2.21 lakh), while electric buses, trucks and ambulances show no progress.
The committee recommended extending incentives for e-2Ws, e-3Ws and e-rickshaws until March 2028 and fixing timelines for e-bus and e-truck rollout.
Preparatory work for EV charging is complete with Bharat Heavy Electricals Limited as implementation agency, but fund utilisation remains low. The panel suggested revising subsidies to attract private investment and setting a time-bound rollout plan.
It also urged early execution of Rs 622.45 crore tenders to upgrade testing agencies—Automotive Research Association of India, International Centre for Automotive Technology, Global Automotive Research Centre and National Automotive Test Tracks—to avoid certification bottlenecks.
Claims for 2.32 lakh EVs remain pending due to incomplete integration with the VAHAN National Vehicle Registration Portal. The panel recommended real-time digital verification and time-bound reimbursements, and suggested consumer subsidies for electric four-wheelers, which are currently excluded from the scheme.
PLI Schemes and Battery Capacity
India ranks 1st in three-wheelers, 2nd in two-wheelers, 4th in passenger vehicles and 5th in commercial vehicles globally, with the sector contributing USD 240 billion (Rs 20 lakh crore) or 7.1 per cent of GDP. The committee called for a focused export strategy.
Under the Production Linked Incentive Scheme for Automobiles and Auto Components (Rs 25,938 crore), Rs 39,081 crore investment has been made against a Rs 42,500 crore projection, but incremental sales of Rs 41,121 crore remain far below the Rs 2.31 lakh crore target.
The panel recommended stronger monitoring and eligibility adjustments.
The PLI Scheme for Advanced Chemistry Cell Battery Storage (Rs 18,100 crore) aims to build 50 GWh capacity, but 40 GWh has been awarded and only 1 GWh commissioned, with no incentives disbursed. The committee called for beneficiary reviews, timeline corrections and greater MSME participation.
Supply Chains, Capital Goods and CPSEs
The panel warned of dependence on critical minerals dominated by the People’s Republic of China, recommending diversification, domestic exploration and investment in alternative battery technologies.
It noted that the capital goods sector contributes about 1.9 per cent to GDP, with a 41.1 per cent import-to-production ratio, and suggested product-wise indigenisation roadmaps, stronger quality controls and procurement support for domestic manufacturers.
It also urged time-bound implementation of the Rs 14,300-crore Construction and Infrastructure Equipment Scheme announced in the Union Budget 2026–27.
The panel recommended revival or closure plans for stressed units, including a time-bound revival strategy for HMT Machine Tools Limited, procurement support for Andrew Yule and Company Limited tea, and modernisation and debt reduction for Cement Corporation of India.
As per the panel report, out of 16 CPSEs under the heavy industries ministry, 11 are profitable while five are loss-making.
The committee emphasised realistic budgeting, faster EV adoption, stronger domestic manufacturing and improved monitoring of flagship schemes, along with transparent reporting and parliamentary oversight.
(KNN Bureau)
