Cabinet likely to clear Rs 10,000 cr FAME II scheme for promotion of electric, hybrid vehicles tomorrow

New Delhi: The Union Cabinet is likely to clear on Thursday a Rs 10,000-crore programme under the FAME-II scheme for promotion of electric and hybrid vehicles, according to official sources.

The much-delayed FAME-II will be for a period of three years instead of five years as envisaged earlier, and for passenger electric cars, the subsidy will be available only for taxi aggregators.

The Rs 10,000 crore support will be used for subsidies on electric buses, passenger cars to be used by taxi aggregators, three-wheelers and two-wheelers, a source said.

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"Under the phase two of the scheme, 7,000 electric buses of prices up to Rs 50 lakh or 40 percent of cost, but only on the basis of operational expenditure (opex) and not capital expenditure (capex) model, will get a subsidy" the source said.

However, the amount of incentives proposed in the scheme for electric buses may further be subject to competitive bidding among original equipment manufacturers, the source said.

Representational image. Reuters.

The FAME-II will also provide subsidy of up to Rs 50,000 for 5 lakh electric three-wheelers and 35,000 strong hybrid and electric passenger cars which are to be used by taxi aggregators.

"There will not be any subsidy for electric cars for private use," the source said.

Around 10 lakh electric two-wheelers will also get a subsidy under FAME-II, the source added.

"The scheme in its second phase will offer a bouquet of incentives, such as exemption from paying road tax, registration fee and parking charges for various categories of electric and strong hybrid vehicles," another source said.

The phase II of the scheme was revamped by the expenditure of the finance committee in a meeting held on Monday.

The incentives will also cover setting up of charging infrastructure for EVs but no target has been set for electric vehicles (EV) sales to be achieved over the five-year period of the scheme's implementation.

Initially, in August last year an inter-ministerial panel had finalised the roadmap for Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) II scheme with an outlay of around Rs 5,500 crore spanning over five years and subsidy support for all types of electric vehicles.

However, later on in November the government had extended the phase-I FAME scheme till March 2019 or till a notification for the second phase.

The Ministry of Finance had approved enhancement of the total outlay for the first phase of the scheme from Rs 795 crore to Rs 895 crore.

The scheme was supposed to be implemented over a two-year period commencing 1 April, 2015. It was to be followed by the rollout of the second phase. The first phase was extended four times for six months each.