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Modi Government delays FAME 2 by 20 months: Phase-1 extended for electric vehicles yet again

The phase-1 of FAME scheme to promote the use and manufacturing of hybrid and electric vehicles was initially implemented for just two years starting in April 2015. Phase-II of this scheme was to be implemented in April 2017 but it has been delayed by the Modi government for over 20 months now.

By: | Published: November 26, 2018 10:12 AM
Electric Vehicles in India

Prime Minister Narendra Modi led government has once again extended the first phase of FAME scheme that is aimed at promoting mass adoption and manufacturing of electric and hybrid vehicles in India. The second phase was scheduled to be announced in April 2017 and almost 20 months later the government continues to remain silent on the subsidies it will provide to adopt EVs in India. However, it is not all bad news.

To promote the adoption of electric vehicles (EVs) in India on a large scale, the Central Government has further increased the subsidies by Rs 100 crore taking the total to Rs 895 crore under the FAME scheme (faster adoption and manufacturing of electric vehicles) as per the latest official notification issued by the government. For over a year now the government has been talking about rolling out the second phase of this scheme but the EV manufacturers in India still wait in anticipation. Phase 1 of FAME has already been extended four times in the last two years.

The phase-1 of FAME scheme to promote the use and manufacturing of hybrid and electric vehicles was initially implemented for just two years starting in April 2015. Phase-II of this scheme was to be implemented in April 2017 but it has been delayed by the Modi government for over 20 months now.

The phase-I of the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME India) scheme was supposed to be implemented over a two-year period commencing from April 1, 2015. The first phase of mass adoption of electric vehicles has been extended by four times by six months each with the latest extension comes in effect till March 2019 or till a notification for the second phase is announced. Arun Jaitley led the Ministry of Finance has approved the increase in Budget in the first phase by Rs 100 crore to Rs 895 crore.

On several occasions, the central government has been clear the EVs are the way forward to reduce India's oil import bill and also to achieve zero-emissions. The number of Electric vehicles in India is less than 1% of total vehicle sales and the lack of charging infrastructure is the other big issue. Automakers in India have announced heavy investments in electric vehicles going forward and have not really demanded any subsidies to promote EVs.

However, start-up, battery makers and company's that are not as cash-rich as established automakers are still depended on the Indian government to provide some sort of subsidies and a long-term roadmap for EVs. Anand Mahindra, Chairman of Mahindra Group beleives that FAME scheme should continue so that there is a kind of facilitation and expediting of this process (of electrification of vehicles) as quoted on PTI. Mahindra Electric recently invested Rs 700 crore in expanding its plant in Bengaluru and rolling out the Mahindra Trea electric range of three-wheelers.

Industry experts also believe that mass public transport including buses, autos and taxis will be the first to take this big shift towards electric vehicles and then will be followed by private cars and two-wheelers.

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