IFCI will act as an interface between the government and the applicant companies for the FAME-II subsidy, as per a report
EY will be responsible for auditing the books of the companies that have allegedly claimed the benefits of the scheme wrongfully
EV makers such as Ola Electric, Hero Electric, and Ampere Vehicles have come under the government’s scanner for wrongfully claiming subsidies under the FAME-II scheme
The Ministry of Heavy Industries (MHI) has reportedly enlisted IFCI Ltd, a public sector non-banking finance company (NBFC), and global consultancy firm EY to streamline its FAME-II scheme for electric vehicles (EVs), which has a total outlay of INR 10,000 Cr.
IFCI will act as an interface between the government and the applicant companies for the FAME-II subsidy. It will also handle aspects like data management and calculating subsidies due, people aware of the development told the Economic Times.
Meanwhile, EY will be responsible for auditing the books of the companies that have allegedly claimed the benefits of the scheme wrongfully.
An email sent to a senior MHI official for further clarification on the issue remained unanswered till the time of publishing this article.
Issues related to the FAME-II scheme and its subsidies have been going on since the latter half of last year. The Indian government has been investigating the allegation against several electric two-wheeler manufacturers that they were claiming subsidies under the scheme without adhering to the minimum localisation requirements.
Hero Electric, Okinawa Autotech, Ampere Vehicles, and Revolt were among the first few EV makers to come under the scanner. Subsequently, the government suspended disbursement of subsidies to several two-wheeler manufacturers, which has also hurt the overall EV sales in the last few months.
In the latest development, escooter majors like Ola Electric, Ather Energy and TVS Motor have been accused of keeping their vehicle prices artificially lower to claim subsidies under the scheme.
The total two-wheeler EV registrations in India have been on a decline since October 2022, when it stood at 77,094 units. The number of two-wheeler EV registrations stood at 64,585 units in January. The number stands at 61,975 units in February so far, as per Vahan data.
Many experts are of the opinion that the segment will remain under pressure till the FAME-II issues are resolved.
IFCI already manages 10 of the government’s 14 production-linked incentives (PLI) schemes, including those for the automobile and auto component industry and advanced chemistry cells.
As per the publication’s report, the Centre also collaborated with the Central Board of Indirect Taxes & Customs and the Directorate of Revenue Intelligence earlier to investigate the alleged irregularities on the part of FAME-II beneficiary companies.