Govt hikes FAME 2 outlay by Rs 1,500 crore; Says scheme sops till March 31

The government said subsidies under the FAME 2 will be eligible for vehicles sold till March 31, or till the time funds are available, whichever is earlier.

By Kiran Murali and Amit Vijay M calendar 09 Feb 2024 Views icon5357 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Govt hikes FAME 2 outlay by Rs 1,500 crore; Says scheme sops till March 31

The Ministry of Heavy Industries has enhanced the financial outlay for the second phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme by Rs 1,500 crore to Rs 11,500 crore.

The FAME 2 scheme was rolled out in 2019 with an outlay of Rs 10,000 crore for three years ending in 2022 but was extended to March 2024. The initial target of the scheme was to support 10 lakh electric two-wheelers, 5 lakh electric three-wheelers, 55,000 passenger cars, and 7,000 electric buses.

As of January 31, a total of Rs 5,790 crore was given as subsidies to electric vehicle manufacturers on the sale of 13.41 lakh electric vehicles under the scheme. This includes 11.86 lakh two-wheelers, 1.39 lakh three-wheelers and 16,991 four-wheelers.

Further, the government has sanctioned 6,862 electric buses to various cities, state transport undertakings, and state government entities for intracity operations, as well as Rs 800 crore as capital subsidy to oil marketing companies for 7,432 electric vehicle public charging stations.

As per the revised outlay, Rs 7,048 crore has been allocated for subsidies, of which two-wheelers will get Rs 5,311 crore. Total grants for electric buses and setting up charging stations have also been revised to Rs 4,048 crore.

The government noted that the FAME II is a “fund and term-limited scheme.” Subsidies under the scheme will be eligible for vehicles sold till March 31, or till the time funds are available, whichever is earlier.

In the interim budget presented last week, the government has allocated Rs 2,671 crore for the FAME scheme for the next financial year. While there has been no specific announcement on the extension of the FAME 2 scheme beyond March 31 or a third phase of the scheme, the allocation for the next financial year indicates the government’s plans to continue with the incentives.

New-age OEMs, particularly two-wheeler ones, and industry bodies have been pushing the government for an extension of the subsidies beyond March 31. The demand subsidy given under the scheme has been instrumental in driving the early-stage adoption of electric vehicles in the country. 

"FAME 2 scheme has accelerated the adoption of electric vehicles in the country and additional allocation of capital will continue the trend," said Rahil Gupta, Co-founder and CTO, Hop Electric, 

"This initiative demonstrates a strong commitment to green energy," said Uday Narang, Founder, Omega Seiki Mobility. 

Tags: FAME 2,EVs
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