Centre Considers Extending FAME II Scheme to FY25
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The government is considering the extension of the second leg of its flagship incentive scheme for manufacturing electric vehicles (EVs) into the next financial year and is likely to seek additional resources in the interim budget to expand its corpus.

With the third edition of the Faster Adoption and Manufacturing Electric Vehicles (FAME) scheme yet to get a nod from the finance ministry, possibilities are being explored to extend the current edition till a new supporting framework is put in place, sources aware of the details told ET.


"Additional funds for FAME II can be sought in a vote on account," said a person aware of the matter. The extension would not require multiple approvals as needed for a fresh scheme and will help maintain momentum in the market in the interim, he added. Next year's budget will be a vote on account as general elections are due in April-May.

 

The finance ministry is not keen to approve FAME III yet, which as per estimates would require an outlay of over ₹30,000 crore over the next five years to encourage the adoption of electric two-wheelers, electric buses, and tractors among others.

According to officials aware of the development, there is a view that major electric two-wheeler makers - the largest beneficiaries of FAME I and II - do not require government support anymore. 


"Overall, the thought is that resources are limited," said another official. "If at all they are utilised to incentivise electric mobility, they should not be doled out to personal buyers who can afford cars or two-wheelers. Rather, investments should be made to develop the ecosystem to support e-mobility." 


India is home to three of the world's top 10 polluted cities. The government has been working at encouraging the adoption of electric mobility to reduce vehicular emissions and has set a target of 30% share for EVs in all new vehicle sales in the country by 2030. The share of EVs in the overall sale of vehicles remains low, ranging from about 2% in cars to 5% in two-wheelers. The country is slated to become the third-largest automobile market globally by the turn of the decade. 


The ministry of heavy industries (MHI) has disbursed ₹5,228 crore in subsidies for about 1.15 million electric vehicles sold till December 1, 2023, under FAME II.

The government has additionally sanctioned ₹800 crore under FAME II to the public sector OMCs - IOCL, BPCL and HPCL - for setting up 7,500 fast-charging stations across the country to ease range anxiety and encourage the adoption of EVs.

 

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