KEY HIGHLIGHTS
- FAME III scheme estimates a Rs 30,000 crore outlay over 5 years
- Extending FAME II into the next financial year
- Possibility of additional resources in the interim budget
According to the mdedia reports, the government is currently exploring the idea of extending the second phase of its prominent incentive initiative designed to support the manufacturing of electric vehicles (EVs). It's being considered to stretch this program into the next financial year. There are indications that the government may request additional funds in the interim budget to enhance the overall funding pool for this initiative.
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Government Considers Prolonging FAME II Program
There's been talk about making changes to the FAME III framework, as proposed by the Federation of Indian Chambers of Commerce and Industry (FICCI). However, if we look at the most recent reports, it seems they're thinking about keeping things as they are until a new and supportive framework is ready to roll out.
The idea is that in the meantime, while we're waiting for this new plan, there's a possibility of getting some extra resources allocated in the interim budget. But, and it's an important 'but,' this can only happen once the finance ministry gives its approval. So, any changes or extensions are basically on hold until the financial folks give the green light.
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The proposed extension won't need multiple approvals, unlike a new scheme, making it easier to maintain market momentum temporarily, he noted. The upcoming budget for next year will be a vote on account due to the approaching general elections in April-May.
Looking at the bigger picture, FICCI's proposed FAME III initiative is anticipated to demand a substantial budget of over Rs 30,000 crore over the next 5 years. However, some government officials hold the opinion that electric two-wheeler manufacturers, being the primary beneficiaries of the existing FAME scheme, might not require additional government support. They suggest that it might be more beneficial to channel investments into developing a robust ecosystem that can effectively support the growing demand for electric mobility.
According to recent updates, the government has distributed subsidies totaling Rs 5,228 crore as of December 1, 2023. Furthermore, an allocation of Rs 800 crore has been sanctioned to IOCL, BPCL, and HPCL for the purpose of setting up 7,500 fast-charging stations throughout the country.
Verdict
As the government weighs extending EV incentives, the debate over supporting 2-wheeler makers reflects a shift towards prioritizing ecosystem development for enduring e-mobility growth. Stay up to date with all the automotive news and updates by joining our 91Wheels Whatsapp Group today!
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