Big News! Modi Govt approves Rs 10,000 Crore FAME 2 Scheme:Massive Benefits for Electric Vehicles

Fame 2 Scheme 2019: A sizable Rs.10,000 crore budget to be implemented over three years has been allotted showing the government's seriousness in achieving their goal of a more sustainably mobile India by 2030. Expanding on the 2015 FAME 1 Scheme the second phase will also bring focus on the very nascent electric two wheeler industry.

By: | Updated: March 1, 2019 11:26 AM

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Fame 2 Scheme 2019: The much awaited second phase of the Faster Adoption & Manufacturing of Electric Vehicles could finally be here! A recent cabinet meeting of the union government chaired by Narendra Modi has approved a much heftier proposal for the FAME 2 Scheme than was previously speculated. The cabinet approved the Rs 10,000 Crore proposal trumping the previously expected 5,500 crore policy by almost two times. The scheme which is to be implemented over a period of the next three years (2019-2022) is largely an expansion of the presently active FAME1 Scheme which had a total outlay of Rs 895 Crore.

Based on what we know now, the scheme largely focuses on commercial vehicles, public transport and the development of an EV ecosystem with sparse mention of benefits for the private electric car buyer. Electric Two-wheelers will be the primary focus for this phase of the scheme, which is understandable considering they are presently easier to implement even with a sparse ecosystem. For commercial vehicles STUs and fleet owners FAME 2 has a lot to offer, the scheme plans to support the purchase and operation of 10 Lakhs e-2W, 5 Lakhs e-3W, 55000 4Ws and 7000 Buses. However, in the interest of technology advancements, a stipulation has been placed on the source allowing benefits only to those vehicles powered by lithium-ion batteries or higher.

FAME 2 will also bring focus on the infrastructure that surrounds Electric Vehicles aiming to establish 2,700 Public Charging Systems in Metro and cities with a population of over 1 million people and some hill regions where conservation of the ecosystem is key. Each of the selected cities is expected to have a charging station at 3 km intervals. Highways will also get charging stations along routes that lead to major city clusters at intervals of 25kms each.

Even Industry leaders seem to have responded to the policy positively as Dr. Pawan Goenka Managing Director at M&M Ltd said “We applaud the approval of FAME II scheme by the Union Cabinet. The new outlay of Rs 10,000 crore over a period of three years provides a stable policy to promote green mobility in India. It addresses the key issues including National Energy Security, Mitigation of the adverse impact of vehicles on the environment and Growth of domestic technology and manufacturing capabilities. The revised FAME II removes all the uncertainty and will put Electric Vehicles in the fast lane. Mahindra supports the Central Government’s focus to boost EVs in public transportation and now requests local authorities to help facilitate plying of electric vehicles on Indian roads."


The Society of Manufacturers of Electric Vehicles (SMEV) also was happy with the announcement as Sohinder Gill, Director, SMEV told Express Drives, "We're thankful to the government for accepting our demands for a long term scheme with substantial fund support. The support would encourage associated industry players to invest in the sector, which will further help in creating an ecosystem, locally. We look forward to seeing the final notification from the concerned ministry, which will give us clarity on the government’s roadmap of e-mobility'. The SMEV have been long proposing a policy that includes electric two-wheelers citing it as the grass roots for the holistic shift to e Mobility!"

As for private car buyers, it is likely that incentives will come in the form of state government policy that will absolve tax and registration duties on electric vehicles. Although one will have to wait for the policy to be launched to have a better understanding of what benefits will be offered.

Overall prima facie the policy seems to be a mature and well thought move from the government. If all goes according to plan, consumer Electric Vehicles could make it to the market post 2021in a large way. A third and final policy could help India achieve its dream of 30% electric mobility by 2032, drastically reducing our carbon footprint.

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