Moneycontrol
Last Updated : Feb 13, 2019 10:08 PM IST | Source: Moneycontrol.com

Heavy industries ministry says FAME-II not yet finalised, but focus on public transport, R&D creation

Government had started FAME India scheme in 2015 to subsidise manufacturing of electric vehicles

Nikita Vashisht @nikita_vashisht

The rollout of electric vehicles’ subsidy scheme, FAME-II, is unlikely to happen by February, as the Department of Heavy Industries (DHI) informed the Parliament that the second phase of the scheme is “yet to be finalised”.

“(While) the learning’s of phase-I of Faster Adoption and Manufacturing of (hybrid and) Electric (FAME) vehicles have been woven into the second phase, the second phase is not yet finalised,” DHI informed the parliament in a written reply.

The government had started FAME India scheme in 2015 to subsidise manufacturing of electric vehicles. The subsidy under this scheme ranges from Rs 22,000 to Rs 187,000. The scheme has been extended thrice, once each in March 2017, March 2018 and September 2018. The first phase is now applicable until March 2019.

According to government estimates, about 265,335 electric/hybrid vehicles have been supported through “demand creation” and various decisions related to “charging infrastructure and technological support” .

Moneycontrol reported on February 12 that in a meeting held in late January, PMO directed various stakeholders to push charging infrastructure in the country.

Decisions regarding expediting installation of charging facilities at CNG and petrol station, specifying timeline within which such stations will be set up and directing Petroleum and Explosives Safety Organisation (PESO) to give timely clearance for charging stations under the guidance of Department of Industrial Policy and Promotion (DIPP) were taken, sources told Moneycontrol.

Sources said the PMO asked all the stakeholders to increase the number of LNG stations to improve inter-state transportation and of CNG stations for intra-state transportation.

"Lastly, all the states that exempt electric vehicles from road tax will be given subsidy," a source said.

The government has so far spent Rs 895 crore under the first phase of the FAME scheme and allocated Rs 195 crore for 2019-20.

Outline of phase II

In response to the Parliament, the Department gave a draft scheme which included a focus on public transport and supporting research and development.

“Through the second phase, the government proposes to give a push to electric vehicles in public transport and seeks to encourage adoption of EVs by way of market creation and demand aggregation,” the department said.

Moneycontrol had earlier reported in August 2018 that DHI was deliberating subsidising electric buses in order to push public transportation.

“The draft scheme has envisaged the holistic growth of EV industry, including providing for charging infrastructure, research and development of EV technologies and push towards greater indigenisation,” the recent response to Parliament highlighted.

Electric vehicles' industry was hoping for clarity on the rollout of FAME-II in February as Anant Geete, Union Minister for Heavy Industries, had said the government could finalise FAME-II by the end of February.

According to sources, a Cabinet note for FAME-II was to be considered by the ministers in January for its passage by February. Media reports, however, suggest the proposal has not been accepted due to “highly inadequate” resources.

The sale of electric vehicles gained momentum in India after 14 of the 20 most polluted cities in the world were found to be in India. Furthermore, India’s crude oil import bill, essentially to support petrol and diesel based cars, is close to $ 81 billion putting a strain on the fiscal obligations of the government.
First Published on Feb 13, 2019 10:08 pm
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