Row Over Misuse of FAME-II Subsidies Reaches Parliament

Parliamentary Standing Committee Recommends Incentives Under FAME Scheme

The ongoing controversy over the misuse of the Union government’s FAME-II scheme recently reached the corridors of the Indian Parliament. The development comes after the Union government was recently forced to take action against the errant Electric Vehicle (EV) manufacturers who allegedly flouted the scheme norms to claim subsidy.

In the latest Monsoon Session of the Parliament, Lok Sabha MP Dayanidhi Maran asked the Ministry of Heavy Industry if the Society of Manufacturers of Electric Vehicles (SMEV) approached the NITI Aayog alleging sabotage of the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME-II). He also asked the ministry about the actions the ministry took over the issue.

The MP also asked the ministry, through an unstarred question, if the halting of subsidy to the Original Equipment Manufacturers (OEMs) impacted the growth of electric mobility in the country. In response to the query, Minister of State (MoS) For Heavy Industries Krishnan Pal Gurjar told the Lok Sabha that the ministry received complaints against 17 OEMs under the Scheme and took appropriate actions against them.

“The Ministry of Heavy Industries (MHI) had received complaints against 17 OEMs under the FAME India Scheme Phase-II the past 18 months mainly concerning two aspects viz. PMP compliance & Breach of Ex-factory price. Further, incentive payments were stopped in case of those complaints wherever detailed investigations were required,” the minister said in his written reply before the House.

He also informed the Lok Sabha that on account of the development, the ministry put the disbursement of the demand incentives on hold and ordered an investigation by testing agencies of the ministry.

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“After the examination of reports from testing agencies for the alleged OEMs, it was found that six OEMs were fully PMP Compliant while other seven OEMs have found to be violating PMP norms. Further, four OEMs have agreed to refund the excess amount for the Breach of Ex-factory price to the customers/ purchasers of electric vehicles (EVs),” the minister said.

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EV registrations under FAME-II

In another response to the growth of EVs in India, the minister told the House that under the FAME-II scheme, India witnessed registration of 8,32,824 EVs till July 21, 2023. The highest share of EV sales were reported from the two-wheeler segment alone. He also said that under the Scheme, 175 models of EVs were seen in India, while the total number of OEMs stood at 56.

Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme Phase-II is being implemented by the Ministry of Heavy Industries for five years commencing from April 1, 2019 with a total budgetary support of Rs. 10,000 crore.

This phase mainly focuses on supporting the electrification of public & shared transportation and aims to support through demand incentives 7090 electric buses, 5 lakh electric three-wheelers, 55000 electric four-wheeler Passenger Cars and 10 lakh electric two-wheelers. In addition, the creation of charging infrastructure is also supported under the Scheme.