The Finance Ministry is likely to approve a subsidy allocation worth Rs 4,000 crore under the second phase of the FAME India scheme. Sources close to the development told us that the ministry can soon come out with a formal announcement regarding the same. Presently, the subsidy is being offered on electric cars, electric two-wheelers and three-wheelers. Under the FAME 2 though, the Rs 4,000 crore outlay is expected to cover only electric buses and the related charging infrastructure. Interestingly, the charging infrastructure will not only support the buses but electric vehicles of all kinds. Hence, it'll make electric vehicles more user-friendly even for private owners of electric cars and two-wheelers. At present, charging infrastructure is almost non-existent in India, making adoption of Electric Vehicles hard for State undertakings as well as individual customers.
The amount of subsidy to be extended to various types and sizes of electric buses has not yet been disclosed so it'll be interesting to see the kind of impact this subsidy will have on the electric bus prices. Presently, electric buses cost almost twice of a similar-sized diesel/ CNG bus. Hence, it's important that the amount of subsidy extended on these buses should make a considerable difference.
This scheme isn't going to make passenger electric vehicles cheaper so its impact on individual buyers will be minimal. However, electric vehicle adoption in India should ideally start with fleet services including city buses. Hence, the present scheme is in line with this thought process and more importantly, it focuses on improving the charging infrastructure, which will be crucial for these vehicles being successful in their roles. It's important that electric buses are deployed in a planned manner as they'll be the first way in which masses will experience electric mobility, making them the foundation stones for mass electric mobility in a way.