SUMMARY
The subsidies will remain applicable for electric two, three, and four-wheelers sold until March 31, 2024, or until the funds are exhausted
This news comes amid speculation about whether the government would extend the existing FAME Phase II or introduce a new phase to incentivise EVs
The subsidies allotted for electric two, three, and four-wheelers have been updated to INR 7,048 Cr, with a significant portion of INR 5,311 Cr earmarked specifically for electric two-wheelers
The Union Finance Ministry has approved an additional INR 1,500 Cr for the second phase of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-II) programme.
The subsidies will remain applicable for electric two, three, and four-wheelers sold until March 31, 2024, or until the funds are exhausted, whichever occurs earlier.
This development comes amid speculation whether the government would extend the existing FAME Phase II or introduce a new phase to incentivise EVs.
“Further, while enhancing the scheme outlay of INR 1,500 Cr thereby making it INR 11,500 Cr scheme from INR 10,000 Cr, it is hereby informed that the scheme is fund and term limited scheme i.e. the subsidies for demand incentive will be eligible for e-2w, e-3w and e-4w sold till March 31, 2024 or till the time funds are available, whichever is earlier,” Ministry of Heavy Industries said.
The subsidies allotted for electric two, three, and four-wheelers have been updated to INR 7,048 Cr, with a significant portion of INR 5,311 Cr earmarked specifically for electric two-wheelers. Additionally, a separate allocation of INR 4,048 Cr has been designated for the procurement of electric buses and the establishment of electric vehicle (EV) charging stations.
The Ministry of Heavy Industries introduced the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) Scheme, spanning a five-year period starting from April 1, 2019, with an initial budgetary allocation of INR 10,000 Cr. This allocation was subsequently increased to INR 11,500 Cr.
The primary focus of this phase is to bolster the electrification of public and shared transportation. The scheme aims to provide support through demand incentives for the deployment of 7090 eBuses, 5 lakh e-3 Wheelers, 55,000 e-4 Wheeler Passenger Cars, and 10 lakh e-2 Wheelers. Furthermore, the scheme also includes the facilitation of charging infrastructure development.
Under phase-II of FAME India Scheme, 13,63,266 no. of electric vehicles amounting to INR 5854 Cr have been sold by the electric vehicle manufactures to consumers as on February 7, 2024, Union minister Krishan Pal Gurjar informed LokSabha.
Recently, the government reduced budgetary allocation on this EV demand incentive scheme by a little over 44% to INR 2,671.33 Cr for FY25.
As per the government’s expenditure budget for the Ministry of Heavy Industries (MHI) for 2024-25, published on Thursday (February 1) during the interim Budget for this year, the Centre allocated a revised budget of INR 4,807.40 Cr for FY24.
