DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY
DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY
The Department-Related Parliamentary Standing Committee on Industry (Rajya Sabha), chaired by Shri Tiruchi Siva, presented its Three Hundred and Thirty-Second (332nd) Report on the Demands for Grants (2026-27) of the Ministry of Heavy Industries (MHI) to the Parliament on 11th March, 2026. The Report covers the Ministry’s budgetary allocations and key schemes spanning the Automotive Industry, Capital Goods Sector, and Central Public Sector Enterprises (CPSEs) and Autonomous Bodies.
The Committee examined the Demands for Grants 2026-27 (Demand No. 48) of the Ministry of Heavy Industries under Rule 272 of the Rules of Procedure and Conduct of Business in the Council of States (Rajya Sabha). The Committee took oral evidence from the Secretary and other officers of the Ministry, as well as from representatives of the CPSEs and organisations under its administrative control. The key recommendations of the Committee contained in the Report are summarised below:
BUDGETARY ALLOCATIONS: NEED FOR REALISTIC BUDGETING AND BALANCED EXPENDITURE
The Committee noted that the Budget Estimates (BE) 2026-27 for the Ministry stand at Rs 7,939.90 crore, against the Ministry’s projected requirement of Rs 9,484.32 crore, reflecting a significant shortfall of about 16 per cent. Revenue expenditure accounts for 99.96 per cent (Rs 7,937.08 crore) of the total outlay, while capital expenditure has been reduced to a negligible Rs 2.82 crore (0.04 per cent), down sharply from Rs 502 crore in BE 2025-26.
The Committee has expressed concern over recurring BE-to-RE (Revised Estimates) compression — allocations were reduced by roughly one-third at the Revised Estimates stage in 2024-25 and 2025-26 — pointing to persistent overestimation and systemic weaknesses in expenditure planning. The declining trend of RE utilisation — 84.23 per cent in 2022-23, 76.87 per cent in 2023-24, and 58.90 per cent in 2024-25 — was also flagged as a matter of concern.
Key recommendations of the Committee:
PM E-DRIVE: CORRECTING SEGMENT IMBALANCES IN ELECTRIC MOBILITY
The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, with a total outlay of Rs 10,900 crore (effective from April 2024 to March 2028), has been allocated Rs 1,500 crore in BE 2026-27. As on 31 January 2026, a total of 16,56,335 electric vehicles (EVs) have been incentivised against a revised target of 28,26,634 EVs — an achievement of about 58.6 per cent.
Progress remains heavily concentrated in the electric two-wheeler (e-2W: 14,31,133 units) and electric three-wheeler L5 (e-3W L5: 2,21,600 units) segments. By contrast, electric trucks (e-trucks) and electric buses (e-buses) have recorded nil achievement, and the electric rickshaw/electric cart (e-rickshaw/e-cart) segment has reached only 3,602 units against a revised target of 39,034. Electric ambulances (e-ambulances) also remain at zero.
Key recommendations of the Committee:
ELECTRIC VEHICLE PUBLIC CHARGING INFRASTRUCTURE: EXPANDING PRIVATE PARTICIPATION
The Committee noted that preparatory steps for the electric vehicle public charging stations (EVPCS) component under PM E-DRIVE — including appointment of Bharat Heavy Electricals Limited (BHEL) as Project Implementation Agency and revision of benchmark costs by the Bureau of Energy Efficiency (BEE) — have been completed. However, fund utilisation remains limited.
The Committee observed that the existing differentiated subsidy structure provides limited support for chargers in Categories C (all other locations not included in Government/PSU-linked categories) and D (battery swapping and battery charging stations), which may restrain private investment and slow expansion of charging networks in commercially important and high-demand locations.
Key recommendations of the Committee:
UPGRADATION OF TESTING AGENCIES: AVOIDING CERTIFICATION BOTTLENECKS
Tenders worth approximately Rs 622.45 crore have been floated for equipment procurement for the upgradation of four national testing agencies — Automotive Research Association of India (ARAI), Pune; International Centre for Automotive Technology (ICAT), Manesar; Global Automotive Research Centre (GARC), Chennai; and National Automotive Test Tracks (NATRAX), Indore — but budgetary utilisation remains nil so far.
Key recommendation of the Committee:
PENDING OEM CLAIMS: ACCELERATING INCENTIVE DISBURSEMENT
As on 31 January 2026, claims relating to 2,32,588 electric vehicles are under process for reimbursement to original equipment manufacturers (OEMs), with the bulk relating to the e-2W segment. Delays were attributed to non-integration of certain State vehicle registration portals with the National Vehicle Registration Portal (VAHAN) and availability of masked customer data, which hindered verification.
Key recommendations of the Committee:
INTRODUCTION OF CONSUMER SUBSIDY FOR ELECTRIC FOUR-WHEELERS
The Committee noted with concern that electric four-wheelers (e-4Ws) are not covered under the PM E-DRIVE Scheme, despite the significantly higher upfront cost of e-4Ws vis-à-vis conventional internal combustion engine (ICE) vehicles acting as a deterrent for prospective buyers.
The Committee observed that while manufacturing-linked incentives are available under the PLI (Production Linked Incentive) Scheme for Automobile and Auto Components, these do not directly mitigate the affordability gap faced by end consumers. In the absence of a consumer-oriented subsidy, the transition in the four-wheeler segment — particularly among middle-class and private buyers — may remain slow and sub-optimal.
Key recommendations of the Committee:
AUTOMOTIVE EXPORTS: STRATEGY FOR GLOBAL COMPETITIVENESS
India ranks 1st in three-wheelers, 2nd in two-wheelers, 4th in passenger vehicles and 5th in commercial vehicles globally. The automotive sector contributes approximately USD 240 billion (about Rs 20 lakh crore) to the economy, accounting for about 7.1 per cent of India’s GDP and nearly 49 per cent of manufacturing GDP.
Key recommendation of the Committee:
PM EBUS SEWA — PAYMENT SECURITY MECHANISM: ENSURING ADEQUATE FINANCIAL SUPPORT
The PM eBus Sewa — Payment Security Mechanism (PSM), with a total outlay of Rs 3,435.33 crore, aims to provide assured payment security for up to 38,000 or more electric buses (e-buses) for 12 years. However, the allocation in BE 2026-27 has been reduced to just Rs 12 crore (revenue only), with no fresh capital provision, even as large-scale deployment remains at an early stage.
Key recommendations of the Committee:
SCHEME TO PROMOTE MANUFACTURING OF ELECTRIC PASSENGER CARS (SPMEPCI): COMPREHENSIVE REVIEW NEEDED
Despite requiring a minimum investment of Rs 4,150 crore (USD 500 million) and offering concessional customs duty on imports, no applications were received under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) before the deadline of 21 October 2025.
Key recommendation of the Committee:
PLI SCHEME FOR AUTOMOBILES AND AUTO COMPONENTS: BRIDGING THE PERFORMANCE GAP
The PLI Scheme for Automobiles and Auto Components, with a total outlay of Rs 25,938 crore, has been allocated Rs 5,939.87 crore in BE 2026-27 — approximately 74.8 per cent of the Ministry’s total demand.
As on 31 December 2025, cumulative investment stands at Rs 39,081 crore (against a five-year projection of Rs 42,500 crore), while incremental sales amount to only Rs 41,121 crore (against a target of Rs 2,31,500 crore) and employment generated is 61,241 persons (against a projection of 1,48,147). Total incentive disbursement of Rs 2,378 crore up to 31 January 2026 remains a small proportion of the total outlay.
Key recommendations of the Committee:
PLI FOR ADVANCED CHEMISTRY CELL (ACC) BATTERY STORAGE: URGENT COURSE CORRECTION
The PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage, with an outlay of Rs 18,100 crore, aims to create 50 GWh of manufacturing capacity. However, only 40 GWh has been awarded so far, and just 1 GWh has been commissioned, with the remaining 39 GWh under commissioning. No incentives have been disbursed due to non-fulfilment of eligibility conditions.
The Committee expressed serious concern over the massive disconnect between the approved subsidy path and the actual meagre allocations and utilisations.
Key recommendations of the Committee:
CRITICAL MINERALS AND SUPPLY CHAIN RESILIENCE: REDUCING DEPENDENCE ON CHINA
The Committee expressed deep concern over India’s dependence on rare earth and critical minerals, which are largely imported and dominated globally by a few countries, particularly the People’s Republic of China, which contributes a major share of mining output and processing capacity. Recent Chinese export restrictions on key rare earth magnets have resulted in supply chain bottlenecks impacting Indian industries, including EV manufacturers.
The Committee reiterated that batteries constitute a large share of the cost of an electric vehicle — the single largest component — making domestic ACC manufacturing indispensable for lowering EV prices, strengthening energy security, and building export competitiveness.
Key recommendations of the Committee:
CAPITAL GOODS SECTOR: ADDRESSING IMPORT DEPENDENCE AND TECHNOLOGY GAPS
The capital goods sector contributes about 1.9 per cent to GDP (Gross Domestic Product) and is central to objectives such as Make in India and Atmanirbhar Bharat. However, the Committee noted that import-to-production ratios remain particularly adverse in machine tools, textile machinery and food processing machinery. The overall import-to-production ratio for capital goods stands at about 41.1 per cent, though down from 53.9 per cent in 2022-23.
The budgetary provision for the Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector in 2026-27 is Rs 125.36 crore — barely 1.58 per cent of the Ministry’s total allocation.
Key recommendations of the Committee:
NEW SCHEME FOR CONSTRUCTION AND INFRASTRUCTURE EQUIPMENT (CIE): TIME-BOUND OPERATIONALISATION
A new Scheme for Enhancement of Construction and Infrastructure Equipment (CIE), with a total financial outlay of Rs 14,300 crore over seven years, was announced in the Union Budget 2026-27 with an initial provision of Rs 200 crore. The domestic CIE market is valued at about Rs 1.03 lakh crore and faces significant import dependence. The Scheme is expected to catalyse new investment and generate employment and export gains.
Key recommendations of the Committee:
CAPITAL GOODS SCHEME PHASE II: ACCELERATING TECHNOLOGY COMMERCIALIZATION
Under Phase II of the Capital Goods Scheme, 29 projects have been sanctioned with Government contribution of about Rs 715 crore. The Scheme has led to development of more than 100 niche technologies, generated revenue and yielded patent filings and intellectual property.
Key recommendations of the Committee:
PERFORMANCE OF CPSES: CONSOLIDATING TURNAROUNDS
Out of 16 operational CPSEs under the Ministry, 11 are now profit-making and the number of loss-making CPSEs has reduced to 5. The Committee particularly appreciated the turnaround efforts in Heavy Engineering Corporation Ltd. (HEC) and Engineering Projects India Ltd. (EPIL).
Key recommendations of the Committee:
REVIVAL OF HMT MACHINE TOOLS LIMITED: STRATEGIC IMPERATIVE FOR INDUSTRIAL SELF-RELIANCE
The Committee, following its study visit and detailed interactions with company management, observed that reviving HMT Machine Tools Ltd. (HMT MTL) is imperative for India’s strategic industrial security, machine tool self-reliance, and support to Defence/Space sectors. The company, incorporated in 1953 as India’s pioneering “Mother of Machine Tools,” has supplied high-precision, import-substituting equipment to Indian Space Research Organisation (ISRO), Bhabha Atomic Research Centre (BARC), Indian Railways, Armed Forces and other strategic entities.
Key recommendations of the Committee:
ANDREW YULE AND COMPANY LTD. (AYCL): INSTITUTIONAL PROCUREMENT SUPPORT
Following its study visit to Kolkata, the Committee noted that AYCL contributes to national tea production and employs a large number of workers across estates in Assam and West Bengal. The Tea Division has been incurring continuous losses due to structural challenges under the Plantation Labour Act, competition from small tea growers, and poor internal accruals.
Key recommendations of the Committee:
CEMENT CORPORATION OF INDIA (CCI): MODERNISATION AND DEBT REDUCTION
Cement Corporation of India (CCI) has returned to profitability but faces intense competition from large private players. Actual Internal and Extra Budgetary Resources (IEBR) utilisation has lagged significantly behind the Budget Estimates.
Key recommendation of the Committee:
BUDGETARY SUPPORT TO CPSES AND CMTI
The allocation under Support to Central Public Sector Enterprises remains minimal at Rs 2.23 crore in BE 2026-27, reflecting a decline from Rs 3.21 crore at RE 2025-26. Several CPSEs continue to face financial stress, legacy liabilities and pending statutory dues.
The Central Manufacturing Technology Institute (CMTI), Bengaluru, has been allocated Rs 22.04 crore in 2026-27, entirely under revenue with no capital provision.
Key recommendations of the Committee:
CONCLUDING OBSERVATIONS
The Committee’s Report contains a comprehensive set of recommendations aimed at strengthening the effectiveness of the Ministry’s flagship schemes, improving fiscal discipline, accelerating India’s transition to electric mobility, deepening domestic manufacturing in capital goods, securing critical mineral supply chains, and ensuring the revival and long-term sustainability of CPSEs. The Committee has emphasised the need for realistic budgeting, outcome-based monitoring, time-bound implementation, and transparent reporting to Parliament.
Note: The full text of the Report, as presented to Parliament, is available on the Rajya Sabha website at: https://sansad.in/rs → Committees → Department-related Standing Committees → Industry → Reports.