Finance ministry raises questions over PLI plan for rare-earth output

Says these subsidies could leave bidder with little incentive to improve efficiency or cut costs

The Department of Expenditure (DoE), under the Union Ministry of Finance, has raised questions on the Ministry of Heavy Industries’ (MHI’s) ₹7,350 crore production-linked incentive (PLI) scheme to boost the domestic manufacturing of rare-earth permanent magnets (REPM). 

It has said while it (the MHI) aims to reduce dependence on magnets imported from China, this could leave India dependent on rare-earth oxides from abroad and provide subsidies so generous that the winning bidders may have little incentive to improve efficiency or cut costs. 

The DoE also said the scheme could set a precedent of launching PLI schemes each time there is