Electric Vehicles Get a Boost with Rs 10,000 Crore FAME-II Scheme

Subsidies will be offered on private two-wheelers and three- and four-wheel commercial electric vehicles.

The FAME II scheme plans to ensure availability of at least one charging station in a grid of 3km x 3km.

(Photo Courtesy: Mahindra Electric)

With an eye on promoting electric and hybrid vehicles, Finance Minister Arun Jaitley said the Union Cabinet has cleared a Rs 10,000-crore programme under the FAME-II scheme.

The scheme will be implemented over a period of three years with effect from 1 April 2019. It is the expanded version of the present scheme FAME India I (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) which was launched on 1 April 2015, with a total outlay of Rs 895 crore, an official statement said.

The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicles by way of offering upfront incentive on purchase of electric vehicles and also by way of establishing necessary charging infrastructure for EVs.

The emphasis will be on electrification of public transport that includes shared transport, demand incentives on operational expenditure mode for electric buses will be delivered through state/city transport corporations (STUs), the statement said.

In three-wheeler and four wheeler segments, incentives will be applicable mainly on vehicles used for public transport or registered commercial purposes, it said. In the two-wheeler segment, the focus will be on private vehicles.

"Through the scheme, it is planned to support 10 lakh electric two-wheelers, five lakh three-wheelers, 55,000 four-wheelers and 7,000 buses," the statement said.

The scheme will help in addressing the issue of environmental pollution and fuel security.

In order to encourage advance technologies, the benefits of the incentives will be extended to only those vehicles which are fitted with advanced battery like lithium-ion battery and other new technology batteries.

The scheme also proposes support for setting up of charging infrastructure whereby about 2,700 charging stations will be set up in metros, other million-plus cities, smart cities and cities of hilly states across India, the statement added. The plan is to ensure availability of at least one charging station in a grid of 3km x 3km, it added.

The establishment of charging stations are also proposed on major highways connecting major city clusters. On such highways, charging stations will be established on both sides of the road at an interval of about 25 km each, it said.

The much-delayed FAME II was revamped by the expenditure of the finance committee in a meeting held Monday.

Initially, in August last year an inter-ministerial panel had finalised the roadmap for Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) II scheme with an outlay of around Rs 5,500 crore spanning over five years and subsidy support for all types of electric vehicles.

However, later on in November the government had extended the phase-I FAME scheme till March 2019 or till a notification for the second phase.

The Ministry of Finance had approved enhancement of the total outlay for the first phase of the scheme from Rs 795 crore to Rs 895 crore.

The scheme was supposed to be implemented over a two-year period commencing 1 April 2015. It was to be followed by the rollout of the second phase. The first phase was extended four times for six months each.