FAME II Subsidy Allocation Increased By ₹1,500 Crore

In what seems to be the final push for the current EV subsidy scheme, the Ministry of Heavy Industries has enhanced the financial outlay for the second phase of the Faster Adoption and Manufacturing of Electric Vehicle (FAME) scheme. The FAME-II’s allocated funds have now been increased by adding another ₹1500 crore to the scheme, and the outlay now stands at ₹11,500 crore. 

The initial target of the scheme was to aid the growth of 10 lakh electric two-wheelers, five lakh electric two-wheelers, 5 lakh electric three-wheelers, 55,000 passenger cars, and 7000 electric buses. However, up until, January 31 the scheme gave subsidies worth ₹5,790 crore on the sale of 13.41 lakh EVs, out of which 11.86 lakh were two-wheelers, 1.39 lakh were three-wheelers, and 16,991 were four-wheelers.

With the revised outlay, the cost of subsidies is increased to ₹7,048 crore, out of which ₹5,311 crore will be for two-wheelers. Furthermore, the Government also noted that the FAME II scheme will be a “term-limited scheme” and it will only be eligible for vehicles sold till March 31, or until the funds are available. 

The FAME II scheme was rolled out in 2019 with an initial outlay of  ₹10,000 crore for three years and was originally meant to end in 2022. However, the two years of the pandemic meant that the rate of adoption for electric vehicles was slower than what was predicted as a result the Government had to extend the scheme up to March 2024. With the allocation of funds, it now seems there is a FAME-III on the horizon as well. More details about the same is expected to be announced soon.