India’s Budget Unveils FAME-III Scheme to Power Electric Vehicle Revolution
The upcoming interim Budget is likely to see the introduction of the FAME-III scheme, with an expected allocation of INR 10,000 Cr-INR 12,000 Cr. This scheme is aimed at boosting the adoption of electric vehicles (EVs) by targeting mass transport such as buses, personal mobility for two-wheelers, and encouraging the uptake of alternative fuel vehicles like those powered by hydrogen. The proposed FAME-III initiative comes amidst discussions regarding the extension of the current FAME-II scheme, which has faced controversies, including fines imposed on two-wheeler EV manufacturers for subsidy misappropriation. Despite the setbacks, FAME-II has incentivized the sale of 11.53 Lakh units of EVs with subsidies amounting to INR 5,228 Cr until December 1 last year.
The Ministry of Heavy Industries, after discovering misappropriation of subsidies by certain original equipment manufacturers (OEMs), reduced the incentive under FAME-II to 15% of the ex-factory price of a two-wheeler EV from the earlier 40%. The FAME-III scheme is envisioned to mirror FAME-II with adjustments to support a larger number of vehicle sales and ensure stricter scrutiny. While the industry has been advocating for the extension or the introduction of the third phase of the scheme, there were doubts about the launching of a new scheme ahead of the general elections due to the challenges faced by FAME-II. These developments underscore the government’s efforts to address the issues and promote the widespread adoption of EVs in India.
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