(MENAFN- KNN India) New Delhi, Mar 13 (KNN) The Union Cabinet led by Prime Minister Narendra Modi is expected to make a key decision regarding the extension of the government's FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme at its meeting scheduled for Wednesday.
The second phase of the FAME initiative, which provides subsidies and incentives to boost electric vehicle adoption in India, is set to end on March 31st.
However, the Ministry of Heavy Industries has prepared proposals recommending an extension to prevent disruptions in the country's growing electric mobility sector.
Extension Proposals on the Table According to sources, the ministry has proposed two options for consideration by the Cabinet.
Firstly, extending the existing Rs 12,600 crore FAME scheme for two more years.
Secondly, a shorter four-month extension with a budget of Rs 500 crore to provide support until a new government is formed after the upcoming general elections.
Revised Subsidy Structure If extended, the FAME scheme is likely to see a revised subsidy structure.
The ministry has proposed reducing the per kWh subsidy for electric two-wheelers and three-wheelers to around Rs 5,000 from the previous rate of around Rs 10,000.
Additionally, the subsidy cap for electric two-wheelers has been set at Rs 10,000 per vehicle, while the maximum subsidy for electric three-wheelers is proposed at Rs 50,000.
Importance of FAME Scheme The FAME scheme has played a crucial role in promoting electric vehicle adoption in India.
Under the first phase, around 2,78,000 pure electric vehicles were supported with total demand incentives of Rs 343 crore.
The second phase, which began in April 2019 with an outlay of Rs 10,000 crore for three years, has been instrumental in driving the recent growth of the electric vehicle market in India.
EV Sales on the Rise Despite subsidy cuts and regulatory changes, electric vehicle sales in India have witnessed a robust increase of over 45 percent so far this year.
The total EV registration figure in 2023 is expected to reach nearly 1.5 million units, significantly higher than the previous year's figure of around 1 million.
This growth has pushed the overall EV penetration in the country beyond 5 percent, reaching 6.3 percent compared to 4.8 percent in 2022.
The Cabinet's decision on Wednesday will determine the future trajectory of India's electric vehicle transition and the continued support for the industry through incentives and subsidies.
(KNN Bureau)
MENAFN13032024000155011030ID1107973533
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.