MHI allegedly proposes to deregister Greaves Electric Mobility from FAME India Scheme Phase II Scheme

Greaves Electric Mobility (GEMPL) informed the stock exchanges on May 26, that the Ministry of Heavy Industries vide its letter dated May 25, 2023, has alleged that the company purportedly failed to adhere to the Phased Manufacturing Programme Guidelines and allegedly has proposed to deregister it from FAME India Scheme Phase II (‘Scheme’).

MHI has further purportedly directed GEMPL to deposit all the incentive claimed (approximately Rs 124 crore along with interest), under the said scheme to MHI subject to submission of necessary representation.

Greaves Electric Mobility is the electric mobility business of Greaves Cotton. The Board of Directors of GEMPL will be reviewing and analysing the facts regarding the purported notice and the alleged violations for taking appropriate course of action including engaging with the Government to better understand the alleged violations and for a resolution, in accordance with law, they said.

Electric two-wheelers in India are set to get costlier from June 1, 2023 as the government of India has revised the subsidy on the FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) Scheme to Rs 10,000 per kilowatt per hour (kWh) as against Rs 15,000/ kWH. Furthermore, the cap for incentive has been brought down to 15% of the two-wheeled EV’s ex-factory price as against 40% benefit extended earlier. That's a 37.5% cut, which will easily translate into higher vehicle prices.

As per a gazette notification issued on Sunday, May 21, the Ministry of Heavy Industries (MHI) has stated, in a partial modification of its notification issued vide S.O.2258(E) dated June 11, 2021, these amendments will come into force from June 1, 2023.

The three-year FAME II Scheme, for which the government approved an outlay of Rs 10,000 crore, kicked in from April 1, 2019 and received a two-year extension in June 2021, thereby taking the effective period of the subsidy scheme to March 31, 2024.