According to ET, because Finance Ministry has not approved fame iii, it is suggested to extend the current version until a new framework is ready. If accepted, it will streamline the expansion process, as it will not require as many approvals as starting a new scheme. The goal is to maintain momentum in the electric vehicle market, especially since Budget 2024 will be voted on account on February 1 due to the upcoming general elections in April-May.
FAME III approval hesitation: budget concerns and changes in EV support
The Finance Ministry seems cautious about approving FAME III, which envisages a budget of over Rs 30,000 crore over the next five years to encourage the use of electric two-wheelers, buses, tractors and other vehicles. Insiders say major electric two-wheeler manufacturers, which benefited from FAME I and II, will no longer require government support. The general view is that resources are limited, and if they are used to promote electric mobilityThey should focus on developing the ecosystem rather than providing benefits to those individuals who can afford electric vehicles,
Drive for clean air: 30% EV sales target by 2030
India, facing pollution challenges with three cities in the world’s top 10 polluted cities, is actively encouraging electric mobility to reduce vehicle emissions. The government aims to make 30% of all new vehicle sales in the country be electric vehicles by 2030. Currently, the market share of electric vehicles is relatively low, ranging from about 2% in cars to 5% in two-wheelers, even though India is projected to become the third largest global automobile market by the end of this decade.
Fame II: Subsidies for EVs and fast-charging stations
Through FAME II, Ministry of Heavy Industries (MHI) has provided a subsidy of Rs 5,228 crore for about 1.15 million electric vehicles sold by December 1, 2023. Additionally, the government has earmarked Rs 800 crore under FAME II for public sector oil marketing companies (OMCs) like IOCL, BPCL. And HPCL will set up 7,500 fast-charging stations across the country. The effort seeks to address range anxiety and promote wider acceptance of electric vehicles.