FAME-III To Be Implemented Soon But Will Not Feature In Union Budget: MHI Minister

The Centre is working on the implementation of the third phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, but it is unlikely to be implemented in the upcoming Union Budget 2024-25, union minister for heavy industries and steel HD Kumaraswamy said.

Finance minister Nirmala Sitharaman is scheduled to present the Budget on July 23.  

According to PTI, Kumaraswamy said that the Centre is currently working on the FAME-III scheme, which aims to promote adoption of electric vehicles (EVs) in the country.

“Preparatory work is already underway. Various ministries have recommended strategies for implementing the FAME-III programme. It is expected to be rolled out in the coming months,” Kumaraswamy was quoted as saying during an event organised by auto industry body SIAM.

On the issue of reduction of taxation on hybrid vehicles, Kumaraswamy said Prime Minister Narendra Modi will take the final call on this and the finance ministry will work on it. This comes on the heels of the state government of Uttar Pradesh wavering off registration tax on FAME-II eligible hybrid cars in the state.

Earlier in June, reports said that the FAME-III scheme will carry a budget outlay of INR 10,000 Cr and will be announced during the Budget. 

The scheme is likely to keep the adoption of public transport such as ebuses, along with two-, three-, and four-wheelers at its focal point and introduce reforms for charging infrastructure as well. 

In the run up to the implementation of the scheme, the ministry of power also proposed new guidelines to reduce the approval time for power connection for electric vehicle charging stations earlier this month. 

The power ministry’s draft revised guidelines on charging infrastructure for EV proposes that the approval time in metropolitan areas will be cut from 7 days to 3 days, and in municipal areas from 15 days to 7 days. In rural areas, the time will be reduced from 30 days to 15 days.

The FAME-II scheme, which ended on March 31, was launched in 2019 with a total outlay of INR 10,000 Cr. It was slated to support 10 Lakh electric two-wheelers, 5 Lakh electric three-wheelers, 7,000 electric buses, and 55,000 electric four-wheeler passenger cars through subsidies.

While the scheme facilitated players to up production of EVs, it was also in a lot of controversies. The Centre found that multiple EV players availed subsidies under FAME-II in violation of localisation norms and penalised them.

Hence, the third iteration of the scheme is also likely to have a provision to penalise automakers that flout the norms laid down under the new scheme.