Govt May Restore Financial Support To FAME Defaulter EV Comp

SUMMARY

Among these companies, Revolt, Greaves and Amo have reportedly paid back INR 170 Cr wrongfully claimed subsidies to the government, after the government issued notices around the recovery of subsidy

Defying the government's claim, Hero, Okinawa and Benling, in turn, challenged the recovery notices

Earlier in March, it was reported that the Centre was considering legal action against Hero Electric, Okinawa Autotech and Benling India

The government is reportedly considering restoring financial support to three two-wheeler electric makers, including Revolt Motors, Greaves Electric Mobility and Amo Mobility under its Electric Mobility Promotion Scheme 2024.

However, it may bar others, including Hero Electric, Okinawa Autotech and Benling India from all government schemes in future, ET reported.

Of the 13 companies that the Ministry of Heavy Industries investigated in 2022, Hero Electric, Okinawa Autotech, Ampere Vehicles, Benling India, Amo Mobility, Lohia Auto and Revolt were found to violate the FAME II norms. Following this, the government halted the subsidies of these companies.

The Centre has allocated INR 500 Cr for the new Electric Mobility Promotion Scheme 2024, after it granted a four-month extension to the FAME II scheme in March with an additional corpus of INR 500 Cr. The scheme was to reach its expiry on March 31, 2024.

Among these companies, Revolt, Greaves and Amo have reportedly paid back INR 170 Cr for wrongfully claimed subsidies to the government. It is pertinent to note that the Centre issued notices around the recovery of INR 469 Cr subsidy availed by the defaulted companies between 2020 to 2023.

Defying the government’s claim, Hero, Okinawa and Benling, in turn, challenged the recovery notices.

Citing Okinawa’s spokesperson, ET reported, “We have filed a writ petition in Delhi High Court to recover our outstanding FAME II dues of upwards INR 425 Cr and our case is subjudice. Okinawa Autotech always has been compliant with the scheme guidelines and the same was observed by MHI’s committee headed by Joint Secretary, Mukta Shekhar.”

Meanwhile, not only Joint Secretary Mukta Shekhar’s report was rejected by the Centre, but it also ordered a new investigation into the FAME scheme, as per the report. Moreover, the latest investigation did not agree with the findings of the Shekhar report.

Earlier in March, it was reported that the Centre was considering legal action against Hero Electric, Okinawa Autotech and Benling India. As per the ministry’s estimates, an amount worth INR 155 Cr, INR 125 Cr and INR 50 Cr was to be recovered from Hero Electric, Okinawa and Benling respectively.

Under the FAME II scheme, domestic EV makers can claim a subsidy from the government of up to 40% discount on their vehicles’ cost. But they are also mandated to ensure that at least 50% of products use locally manufactured components.

FAME II was introduced in 2019 with an initial outlay of INT 10,000 Cr for supporting the adoption of EVs in the country. In February this year, the Finance Ministry approved an additional INR 1,500 Cr for the second phase of FAME-II.

This development comes at a time when the overall growth momentum is with the EV industry. Not to mention, aiming to make India a manufacturing hub for EV makers, the government in March also introduced a new EV policy that offers a reduced tariff on the import of EVs.

As per Inc42’s report, in 2023 EV sales surpassed the 1.5 Mn mark, dominated by two-wheelers and three-wheelers.

Last month the electric two-wheeler registrations in the country fell to almost an eight-month low mark at 64,013 units in April, after it surpassed 1 lakh registrations in March.