FAME INDIA

Context: The Ministry of Heavy Industries is tightening its stance on the long-standing issue of violations of the Faster Adoption and Manufacturing of Electric Vehicles (FAME 2) scheme by electric vehicle (EV) manufacturers, signalling a rocky road for the EV industry.

• Moreover, a recent amendment has reduced the subsidies under FAME 2 from Rs 15000/kWh to Rs 10000/kWh.
• The maximum subsidy has been capped at 15 percent of the vehicle price, a drastic cut from the former limit of 40 per cent.
• These recent developments have dented the electric two-wheeler sales momentum. They can also trigger banks to withdraw working capital, rating agencies to downgrade businesses to risky categories and put the survival of many EV startups at stake.

FAME India

• About: FAME (Faster Adoption and Manufacturing of Electric Vehicles) India is a part of the National Electric Mobility Mission Plan.
  • Main thrust of FAME is to encourage electric vehicles by providing subsidies.
• Implementing agency: The Department of Heavy Industry is administering the scheme “Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India”, popularly known as FAME India scheme since 01st April 2015..
• Objective: Promotion of Electric and hybrid vehicle in the country by offering upfront Incentive on purchase of Electric vehicles and by establishing charging Infrastructure for electric vehicles.
• Salient features of the FAME scheme - 2:
  • The scheme with total outlay of Rs 10,000 Crores over the period of three years (2019-20 to 2021-22) will be implemented with effect from 1st April 2019.
  • This scheme is the expanded version of the present scheme titled 'FAME India-1 which was launched on 1st April 2015, with total outlay of Rs. 895 crores.
  • Target is to support 10 Lakhs e-2Wheeler, 5 Lakhs e-3 Wheelers, 55000 4Wheelers and 7000 Buses.
  • Under the scheme of FAME-II, the demand incentive for e-2W has been increased to Rs. 15,000/KWh from Rs. 10,000/KWh with an increase in cap from 20% to almost 40% of the cost of the vehicle to increase the adoption of e-2W.
  • The phase II of FAME-India Scheme has been extended for a period of two years after 31st March 2022.
• Benefits: The scheme will help in addressing the issue of environmental pollution and fuel security.