The Indian government’s National Programme on Advanced Chemistry Cell (ACC) Battery Storage scheme, launched in 2021 with a massive ₹18,100 crore outlay, has seen a significant reduction in its budget allocation for the current fiscal year. This drastic cut is attributed to the fact that beneficiaries under the Production Linked Incentive (PLI) scheme, namely Reliance Industries, Ola Cell Technologies, and Rajesh Exports, failed to meet conditions around investment and domestic value addition. The new allocation stands at ₹15.42 crore, a substantial reduction from the initial ₹250 crore budgeted.
According to officials, the beneficiaries’ inability to meet the December 2024 milestone has led to this reduction. The officials also pointed out that Indian technology for battery production is yet to be developed, making it challenging to disburse incentives. Ola, which had won a substantial 20 GWh capacity, is still waiting to start production and has not claimed any incentives so far. Rajesh Exports, on the other hand, had sought relaxations from the Ministry of Heavy Industries. Despite an initial allocation of 20 GWh to another company, found to be impersonating Hyundai Motor Company, this capacity was later re-bid, with Reliance New Energy Ltd (RNEL) emerging as the winner.
The cut in budget allocation raises concerns about the viability and effectiveness of the scheme, which aimed to promote domestic battery production and reduce reliance on imports. The development may signal a setback for the government’s flagship scheme, which has struggled to deliver on its promises despite massive funding.