The centre has hiked the allocation under the second iteration of Faster Adoption & Manufacturing of Electric Vehicles in India (FAME-II) scheme to INR 11,500 crore, up from INR 10,000 crore. A statement from the Ministry of Heavy Industries said these subsidies for demand incentive will be eligible for electric two, three, and four wheelers sold till March 31, 2024, or till the time funds are available, whichever is earlier.
Subsidies for electric two, three, and four wheelers has been revised to INR 7, 048 crore, of which INR 5,311 crore is for electric two-wheelers. An allocation of INR 4,048 crore has been made for purchasing electric buses and setting up electric vehicle (EV) charging stations.
The government supports EVs and chargers by subsidising them under the FAME India scheme, which is currently in its second iteration (FAME II). The programme aims to spur localisation of EV components while also boosting sales. Manufacturers sell discounted EVs and then seek the subsidised amount from the Centre. This is eventually disbursed with the lag of a quarter after localisation claims are verified by MHI.
The Union government had earmarked INR 5,171.97 crore under FAME India in the budgetary estimates (BE) for fiscal 2023-24 but scaled it down to INR 4,807.40 crore in the revised estimates (RE). According to MHI, INR. 1980.83 crore has been disbursed under FAME II in FY24 till January-end.
In her interim budget 2024 speech, Sitharaman said the government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure. “Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanism,” she added.
Launched in 2019, FAME II has so far subsidised sales of nearly 1.2 million two-wheelers, 141,000 three-wheelers, and 16,991 four-wheelers. Over INR 5,829 crore has been disbursed under the FAME II scheme which was initially launched for three years but later extended to five, ending in 2024.
