Ministry of heavy industries and public enterprises modifies Fame scheme

Mint reported on Friday about the scheme failing to take off, with only 5%, or ₹492 crore, of the ₹10,000 crore allocated under its second phase spent till March. The budgetary allocation of ₹10,000 crore is for three years to 31 March 2022, with the scheme administered by the department of heavy industries (DHI).

Electric vehicles (EVs) are costlier than traditional vehicles with internal combustion engines (ICE). The money under Fame-2 is to be spent to subsidize 500,000 electric three-wheelers, 1 million electric two-wheelers, 55,000 electric passenger vehicles and 7,090 electric buses.

According to a corrigendum published in the Gazette of India on Friday, the ministry of heavy industries and public enterprises modified the second phase of the Fame scheme that began from 1 April 2019.

“Aggregation will be the key method for bringing the upfront cost of 3W EV at an affordable level and at par with ICE 3-Wheelers. EESL will aggregate demand for 3 lakh Electric 3 Wheelers for multiple user segments. Details will be worked out by EESL for implementation,” the Gazette notification said.

EESL is a joint venture of NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd and Power Grid Corp. of India Ltd.

“For Electric Buses, 4 million plus cities (Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune) will be targeted. EESL will go for aggregation of demand in these 9 cities for remaining E-buses under the Scheme on OPEX basis,” the Gazette notification added.

Till March this year, only 2.4%, or 12,129, of targeted electric three-wheelers and 4.3%, or 43,184, of targeted electric two-wheelers had received subsidies under Fame-2. Also, of the 7,090 electric buses to be subsidized under the scheme, 6,265 were sanctioned to the states. Of these, supply orders have been issued for 3,118 buses by state transport utilities (till 31 May).

The Fame scheme’s first phase began on 1 April 2015 and was extended till 31 March 2019. The second phase is to support the electrification of public and shared transportation and help create charging infrastructure.

“Many experts had suggested that more ministries and institutions may be brought in the FAME II scheme,” said a person aware of the development requesting anonymity.