The ministry of heavy industries is expected to ask the finance ministry for an additional INR 1,500-1,700 crore under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme, senior ministry officials said. With robust electric vehicle sales, funds earmarked for the second phase are likely to be exhausted before March 2024.
The heavy industries ministry was allotted INR 5,127 crore for the current fiscal year – the highest allocation since the INR 10,000-crore scheme was launched in 2019.
“We are seeing a great demand for EVs. In all probability, we may run out of funds. Seeking additional funds under FAME II is under consideration,” said a senior official. The ministry wants to ensure there are sufficient funds for the scheme to run its full course.
The official did not specify the amount the heavy industries ministry is seeking, though another official privy to the discussions said it could be INR 1,500-1,700 crore.
Registration of EVs across the segment has been advancing at a brisk pace month-on-month.
Sales of high-speed e-scooters, for instance, rose 20% on-year and 14% on-month to 62,355 units. E-three wheelers too have been seeing a very brisk growth, rising to 56,747 units in August, from 33,130 units in the same period a year ago.
Demand has been equally strong in passenger vehicles. While Tata Motors has been leading the charge, demand is set to increase as others also get into the segment, the official cited earlier said.
Additionally, buses will also be getting incentives under FAME II-some this year and some next.
A total of 99,2751 EVs have received incentives under FAME II, totalling to INR 4,708 crore as on September 20, 2023, shows heavy industries ministry data.
