Govt Increases EMPS Corpus To ₹ 778 Crores, Extends Scheme Until Sept 30

Despite no announcement regarding FAME-III in the annual budget, the Indian Government has extended the Electric Vehicle Promotion Scheme (EMPS) by a couple of months. Originally aimed to offer a stop-gap solution after the FAME-II scheme ceased to exist on March 31, EMPS has been favourable for buyers seeking to make the switch to alternative fuel-powered mobility solutions. 

For the same, the financial corpus has been increased from ₹ 500 crores to ₹ 778 crores, which the government believes should suffice until September 30. The targets too have been enhanced as 560,789 electric vehicles will now benefit from this scheme. Of these, 500,080 electric two-wheelers will receive this benefit, the rest made available for electric three-wheelers.

(Also Read: Government EV Subsidy Scheme Will Continue Until FAME-III Arrives)

The EMPS program has faced a few hiccups along the way. OEM registration was delayed quite a bit, dispersing of funds to the manufacturers has not yet been smoothed out and with the initially-proposed July 31 deadline fast approaching, EV makers were left a little confused at what the future of government subsidies would be. While the extension is likely to provide some immediate relief, manufacturers aren’t going to rest easy until the FAME-III scheme is announced.

But are these subsidies really beneficial for the adoption of EVs in the long run? At the launch of the Bajaj Freedom 125 CNG bike, Rajiv Bajaj said that instead of the government doling out ‘unsustainable subsidies,’ the focus should be on reducing GST rates for two-wheelers across the board. Currently, motorcycles under 350 cc carry a 28% GST, which is quite preposterous considering the highest selling products in the Indian market, like the Hero Splendor, Honda Activa and Honda Shine 125, are used for mass mobility and not pleasure purposes. Hence, a restructuring for the same should be in store soon.