Second phase of FAME scheme to push electric vehicles delayed by six months

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The second phase of Fast Adoption and Manufacturing of Electric and (hybrid) vehicles (FAME), a government-backed scheme to incentivise electric vehicles (EVs), has been delayed by six months. 


The delay, said sources, was due to lack of consensus among stakeholders within the government on allocation of funds.

According to the earlier plan, the second phase was to be announced before the end of the current financial year.


 “Various ministries within the government need to have one voice on the matter,” said a person. The recent volte face on long-term map for electric mobility, it is taking time to firm up the modality for the second phase. “The process has started two months back, after the intent to make India an all-EV market by 2030 was given a rethought. It will now take some time for the policy to be reworked on the basis of the new reality.”.  


“There are many reasons for it getting delayed. We are working on FAME-II and on extending the current policy for some time to ensure continuity,” said an official from the ministry of heavy industries and public enterprises.  


The government’s ambitious electric mobility mission plan has been no stranger to policy flip-flops. Since implementation of FAME in April 2015, this is the second time that execution of the second phase has been put off. Phase-1 was originally for a period of two years up to  March 31, 2017. It was extended to March 31, 2018, with some modification to the discontinuation of  available benefits to the mild hybrid technology under the scheme with effect from April 1, 2017.


Making a U-turn on the ambitious policy, Union transport minister Nitin Gadkari on February 15 dismissed the need for one and added an action plan had been put in place to encourage manufacturing and use of EVs. 


However, EV makers are not complaining. “We have been told the FAME scheme is getting extended for six months, as FAME-II is taking time to finalise. We do not expect many changes. As long as it continues, we are fine with it,” said Mahesh Babu, chief executive officer at Mahindra Electric.


Buyers of electric and hybrid vehicles will get an upfront discount up to a third of the difference between the price of that vehicle and a comparable petrol model. Manufacturers will get reimbursed by the Centre for the discount in 60 to 90 days. The higher the vehicle’s efficiency, the bigger the subsidy.