Second phase of FAME scheme to retain sops for three-wheelers

New Delhi: An Inter-Ministerial panel will meet to finalise modalities for the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) India scheme, and will consider retaining subsidy for electric three-wheelers to promote clean energy public transportation, sources said.

Top officials from departments, including Finance, Power, Road Transport and Highways and Heavy Industry will participate in the meeting, and are likely to approve a subsidy outlay of nearly Rs 4,000 crore for the second phase of the scheme, which may be launched in early September.

“The second phase of the scheme was earlier expected to entail subsidy for electric buses and setting up of charging infrastructure for all categories of vehicles.

“However, the committee has decided to now consider inclusion of electric three-wheelers as well to promote green public transport,” sources stated.

According to sources, government think tank NITI Aayog is also in favour of providing subsidy to three-wheelers to promote e-mobility in public transport.

The Heavy Industry Ministry had sought over Rs 12,200 crore in financial support to implement the scheme over the next five years. However, the Finance Ministry may approve subsidy outlay of around Rs 4,000 crore, officials had said earlier.

At present, the incentive is being offered on purchase of strong hybrid and electric cars, two-wheelers and three-wheelers under the the FAME India – I scheme.

Under the scheme, depending on technology, battery-operated scooters and motorcycles are also eligible for incentives ranging between Rs 1,800 to Rs 29,000, while in three-wheelers it is between Rs 3,300 and Rs 61,000. At present, automotive manufacturers claim the incentive from the government at the end of each month.

With an aim to promote eco-friendly vehicles, the government had launched the scheme in 2015. The ongoing pilot phase of the scheme was earlier extended till September this year or until its second phase is approved.

In his words
Minister of State of Heavy Industries and Public Enterprises, Babul Supriyo, had earlier said the Indian automotive industry needs to develop lithium-ion battery technologies and electric motors for automotive applications and battery management systems.

‘The need for innovative technology is assuming great importance due to rapidly changing product technologies in the automotive industry, depleting fossil fuel resources, high import cost of fuel, issues of environmental degradation and climate change,’ Supriyo said.

He also acknowledged the fact that switching from the conventional internal combustion engine to new technologies including electric and hybrids is essential.

Public mobility first
The government, in the second round has plans to invest about Rs 9,000 crore for the next five years to boost EVs and hybrid vehicles in the country. It is expected that the government will look to electrify public transportation first before extending the incentives to private electric cars and two-wheelers.