FAME scheme for financial support to continue
NEW DELHI: The government’s policy for promoting electric vehicles (EVs) may not have a financial component.
“The policy is not for giving any financial assistance, but to clear the regulatory path — where you need permission and where you don’t, where you need safety precautions and where you don’t,” Minister of State for Power and Renewable Energy RK Singh told BusinessLine.
He said that the government is close to finalising the policy for promoting EVs. Earlier this year, in a letter to various government arms, Singh said that the Centre has set a target of converting 30 per cent of the country’s total vehicle fleet to electric by 2030.
The NITI Aayog action plan for Clean Transportation released last month has already recommended eliminating all permit requirements for EVs in order to encourage electric mobility.
It said, “Getting and renewing permits every year is costly and time consuming. It would require a change in existing permit regime, at the national and State level. Safety issues will need deliberation so that they do not impede the success of such intervention.”
Recently, NITI Aayog Vice-Chairman Rajiv Kumar had stressed on the need for a policy to promote EVs in India, and the think-tank is well placed to develop it.
Meanwhile, Singh said that financial assistance for EVs has been already ensured under the FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) Scheme.
According an official statement, FAME has been effective from April 1, 2015 for supporting hybrid/electric vehicles in market development and manufacturing eco-systems. The scheme has four focus areas, technology development, demand creation, pilot projects and charging infrastructure. It offers a subsidy ranging from ₹7,500 to ₹61 lakh depending on the make of the EV and more incentives to State governments for adopting EV for public transport.
Initially introduced for two years, the scheme was extended in 2017 and is set to be extended once again when it lapses on March 31, according to multiple stakeholders, both within and outside the government.
Minister for Heavy Industries and Public Enterprises Anant Geete also assured the EV industry in February that the government is finalising the second leg of the FAME scheme, which has come as a relief to the EV players.
Naveen Munjal, President, Society of Manufacturers of Electric Vehicles and Managing Director at Hero Electric said, “The EV eco-system in the country needs policy consistency at least for a three-four-year period. Assembly lines have to be scaled and manufacturing value chains optimised while keeping in mind the potential demand, this will not be possible without a sustained policy impetus.” On subsidies, Munjal said that the level of subsidy support offered under FAME is adequate for now.
He said, “No country in the world has been able to push electric vehicles without a regulatory support from the government. The current levels of subsidy offered are adequate, but they need to be continued at the same level for enabling EV penetration.” “There should be no knee-jerk policy changes from the government,” he added.