The Ministry of Heavy Industries recently announced a significant increase in the financial outlay for the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme. The allocation has been raised by Rs 1,500 crore, elevating the total outlay to Rs 11,500 crore.
Background of FAME II Scheme
Originally launched in 2019 with a Rs 10,000 crore budget, the FAME II scheme aimed to span three years until 2022. However, recognizing its impact, the scheme was extended until March 2024. The main aim of FAME II is To boost the use of electric rides everywhere, from fast e-bikes and auto-rickshaws to your next-door neighbor's EV and those big battery-powered buses rolling down city streets.
Progress and Achievements
As of January 31, the scheme has disbursed subsidies totaling Rs 5,790 crore to electric vehicle manufacturers. This financial assistance has facilitated the sale of 13.41 lakh electric vehicles, comprising 11.86 lakh two-wheelers, 1.39 lakh three-wheelers, and 16,991 four-wheelers. Additionally, 6,862 electric buses have been authorized for intracity operations, with Rs 800 crore allocated for establishing 7,432 EV public charging stations.
Revised Allocation
With the enhanced outlay, Rs 7,048 crore has been remarked for all locations, primarily directed towards incentivizing the adoption of electric two-wheelers. Further, significant funding of Rs 4,048 crore has been allocated for electric buses and expanding charging infrastructure. Notably, the FAME II scheme operates on a fund and term-limited basis, with subsidies available until March 31 or until funds are expended, whichever occurs earlier.
Continued Government Support
In the recent budget, the government allocated Rs 2,671 crore for the FAME scheme for the upcoming financial year. The budget boost shows they are pushing for us to go electric and keep those perks coming, even after this year wraps up. While no formal announcement has been made regarding extending the FAME II scheme or introducing a third phase the budget allocation signals the government's intent to continue supporting electric mobility initiatives.
Industry Expectations
New-age Original Equipment Manufacturers (OEMs), particularly in the two-wheeler segment, alongside industry bodies, have advocated for an extension of subsidies(All locations) beyond March 31. Subsidies from the FAME II scheme have been crucial, in India's initial leap towards embracing electric vehicles with enthusiasm. As we guide towards greener transport, ongoing government backing and benefits are necessary to encourage the mass shift and charge up India's electric vehicle movement.
India's stepping up its game with a solid cash injection into FAME II, fueling the charge towards an electric vehicle future. The government is investing in charging infrastructure at the same time as trying to hasten the adoption of electric vehicles across a range of market categories through subsidies and incentives. Pushing the support past March 31 is a clear sign that India's betting big on electric vehicles to power its sustainable growth goals. The FAME II initiative is a prime mover in regrouping everyone together pushing India toward cleaner transport solutions.