FAME III to boost electric mobility with ₹30,000 crore subsidy and charging infrastructure
The faster Adoption and Manufacture of Electric Vehicles, India’s subsidy scheme for electric vehicles, may only move to its next phase if there are residual funds at the end of the current fiscal year, officials said.
The business community has advocated the government for the extension of the incentives provided under the current FAME 2 program.
Companies can give up to a 40% discount on the price of locally produced automobiles and claim it as a government subsidy under FAME 2, which expires this fiscal year.
FAME II plans to support 7,000 electric buses and 1 million electric two-wheelers (E2W) (e-buses).
“If there are residual funds at the end of the financial year, then we may consider another phase,” a government official said.
The representative claimed there had been industry representations asking for funding to last longer.
“There is a view in the industry that while there were incentives for newcomers and for really large companies, EV makers that were somewhere in the middle may be left out,” the official said.
From 2019 on, the center would provide EV manufacturers with incentives totaling Rs 10,000 crore. The eligibility requirements for these benefits have increasingly become more stringent, and they are tied to the localization of cars.
Two-wheeler EV manufacturers have allegedly misappropriated subsidies under the plan, and the Ministry of Heavy Industry has opened an investigation.
For FY24, the government intends to provide Rs 5,000 crore through the FAME II program.
SOP for an automobile PLI
The terms for obtaining benefits under the Production Linked Incentive Program for the Automobile and Auto Component Industries were outlined in standard operating procedures released by the government on Thursday.
Beneficiary companies will be expected to provide information about their tier 1 suppliers by the SoPs.
The updated SOP is considered a softening of the government’s attitude that would lessen the burden of documentation on PLI beneficiaries. The government had previously intended to request information regarding Tier 3 suppliers as well.
The PLI scheme’s project management organization, IFCI Ltd., will keep an eye on how the program is carried out and whether recipients are keeping their promises. According to SOPs, producers’ claims for random verification and localization would be compared to data from the Goods and Services Tax (GST) and Customs.
Under the PLI initiative, the center has set aside Rs 25,938 crore for autos and auto parts. Applications for this section of the PLI plan, which was announced in September 2021, have been submitted by as many as 115 companies.