The finance ministry is going to approve Rs. 4000 crore as subsidy under second phase of FAME and it will be officially announced soon
The government is going to announce second phase of Faster Adoption & Manufacturing of Hybrid and Electric Vehicles (FAME) soon. But the FAME 2.0 scheme will likely only offer subsidy for electric buses and setting up of charging stations for all category. The finance ministry is reportedly going to approve Rs. 4000 crore as subsidy under second phase of FAME.
The government has already decided not to give subsidy for personal electric car buyers as this segment is very small as they want to make public transport electric, so that people will have confidence in buying EVs. The government bought EVs from Tata Motors and Mahindra for higher officials to promote EVs and this didn’t go according to plan.
The public sector is the major contributor of pollution as most of the trucks and buses are not frugal and emit harmful gases, so this move will certainly reduce pollution. The heavy industry ministry has already asked government to give financial support for implementation of second phase of FAME scheme.
The ministry has asked more than 12,200 crore and this money will be spent on next five years on FAME scheme. The decision has already taken on a meeting held on August 1 and they are expected to announce it formally soon. The cabinet will take a final decision on second phase of FAME scheme in two weeks.
Earlier reports indicated that government will give subsidy for electric cabs instead of personal EVs as it will certainly help Ola and Uber taxi services. But to get these cash benefits from government, the entire fleet of cars need to be changed to electric vehicles. Industry experts are not happy with this decision as buyers opted for EVs only because of subsidy and sales will decline even more.
The FAME 1 scheme provided Rs. 1.3 lakh as incentive for customers who bought hybrid or electrics cars in India but still people prefer regular cars. According to earlier plans, the government was expecting 40 percent of new cars sales to come from electric vehicles and full electrification was expected to be completed by 2047.