The Department of Heavy Industries is likely to grant a two-year extension to the FAME or Faster Adoption and Manufacturing of Strong Hybrid and Electric Vehicles scheme. The Union Government had rolled out the policy in 2015 to encourage the adoption of electric vehicles. The second phase of the scheme was launched in April 2019 with a total outlay of Rs 10,000 crore rupees for three years, to support electric vehicle buyers with subsidies. CNBC-TV18 has learnt from sources that the scheme which was set to expire in March 2022 is likely to be extended till 2024.
Officials in the government believe that the FAME scheme needs restructuring as it has been unable to generate much traction for electric vehicle demand. While the aim of the scheme was to support the purchase of 10 lakh electric two-wheelers, only 58,613 electric two-wheelers have been purchased so far. Similarly against the aim of 5 lakh electric three-wheelers, only 15829 electric three-wheelers have been supported so far. According to sources, only 5 percent or 500 crores out of an allocation of 10000 crores has been spent so far.
While the scheme is likely to get a two-year extension, there is going to be no additional allocation of funds said a source. The remaining funds amounting to 9500 crores will be used to support demand incentives and electric vehicle adoption under the FAME scheme till 2024, said an official requesting anonymity.
CNBC-TV18 had earlier report that the government is looking to restructure the FAME scheme with higher incentives for two-wheeler buyers. The Centre has been considering a proposal to increase the demand incentive on electric two-wheelers from the current Rs 10,000/KWh to Rs 15000-20000/KWh. There is also a plan to acquire 3 lakh electric three-wheelers and 5000 buses that are being considered.
(Edited by : Abhishek Jha)
First Published: IST