The Budgetary outlay for the third edition of the Centre’s flagship Faster Adoption and Manufacturing of Electric Vehicles scheme (FAME-III) is likely to be lower than Rs 10,000 crore earmarked for the current version (FAME-II), according to official sources.
The incentives under FAME-III will also be subject to domestic value addition (DVA) targets.
According to sources, FAME-III allocation is being decided, taking into account the incemtives being given to investirs under the auto and battery production-linked incentive (PLI) schemes.
“International experience shows that the outlays for such schemes are tapered down with time. These schemes are meant to give an initial push or to activate the market,” an official said.
Of the total outlay of Rs 10000 crore for FAME-II only Rs 5228 crore has been utilised so far.
Besides, the Centre plans to introduce domestic value addition (DVA) targets in place of the phased manufacturing programme (PMP).
“Deliberations are ongoing to determine the targets of DVA, which may be around 50%. However, the PMP aspect of the FAME-II scheme will be completely removed from the third iteration.”
Furthermore, the scheme is expected to incorporate SoPs (Standard Operating Procedures) or ‘Fail-Safe’ mechanisms.
These have been designed based on the key learnings gained from the past two iterations of the scheme.
Notably, in the FAME-II scheme, several electric two-wheeler manufacturers allegedly availed themselves of government subsidies while using imported components, which was against the norm.
The FAME-III scheme is likely to mandate manufacturers to report changes in the supply chain.
It will also incorporate a detection mechanism to check the routing of imports through traders, among other things. The mechanism will utilise methods such as ‘desk appraisals, field visits, and periodic surveillance’.
Additionally, the four testing agencies under the ministry will regularly check the localised component requirements for availing of the benefits of the scheme.
At present, the FAME-II scheme mainly focuses on supporting electrification of public and shared transportation and aims to support, through demand incentives, 7,090 e-buses, 5 lakh e-3 wheelers, 55,000 e-4 wheeler passenger cars, and 10 lakh e-2 wheelers.
In addition, the creation of charging infrastructure is also supported under the scheme.
