FAME III Subsidies Incoming, ₹2,671 Crores Allocated In Interim Budget

At the 2024 Interim Budget, Finance Minister Nirmala Sitharaman laid the financial outlay for the FAME subsidies. While we were curious whether or not a FAME-III would be introduced, the government allocating funds has given us a glimpse. It isn’t as vast as before, the scheme’s fund allocation for the financial year 2024-2025 reduced to ₹2671 crore from ₹4807 crore previously. 

Additionally, ₹3,500 crore has been allocated towards a production-linked incentive scheme for automobiles and components for the next few years. This was done to support manufacturing and the development of charging grids in India. 

Recently, the government also enhanced the financial outlay for the second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme by ₹1500 crore bringing the total budget of the scheme to ₹11,500 crore. However, it was also noted that the FAME-II scheme will be a “fund and term-limited scheme”, and that it will be eligible for electric vehicles sold till March 31, or till the funds are available. 

Now whether subsidies offered to the electric vehicles post-March 31 will be part of the FAME-II scheme or be carried over onto the next scheme named FAME-III remains to be seen. Furthermore, how the subsidy structure will now look will also be key on how much benefits the buyers get by going electric. Details about the same should be revealed in the full budget that will be presented in July this year, once the new government is formed after the 2024 Lok Sabha elections.