REVISED FAME II SUBSIDY

The Government has tweaked the FAME II scheme to encourage faster proliferation of electric vehicles.

- Bhushan Mhapralkar

The crucial changes prompted by the Government to the FAME II scheme involving electric vehicles is claimed to be on the back of its failure achieve the desired results. Following FAME I scheme that was rolled out in 2015 to encourage early adoption of electric vehicles and bring down the country’s dependence on crude oil, much of which is imported, the FAME II scheme was introduced in April 2019 with a total outlay of Rs 10,000 crore rupees for three years. While the FAME I scheme offered up to Rs.1.38 lakh incentives for electric and hybrid vehicles with an initial outlay of Rs 75 crore from plan fund, the FAME II scheme offered an outlay of Rs.10,000 crore for a period of three years. Out of total budgetary support, about 86 percent of fund was allocated for demand incentive to create demand for xEVs in the country. The phase aimed to generate demand by way of supporting 7000 e-buses, five-lakh e-three wheelers, 55000 e-four wheel passenger cars (including strong hybrid) and 10 lakh e-two wheelers. It was taken into consideration that depending upon off-take of different category of xEVs, these numbers would vary. A provision was thus made for inter as well as intra segment wise fungibility.