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FAME India scheme

  • IAS NEXT, Lucknow
  • 22, Mar 2022
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Under FAME-India Scheme, incentives are provided to buyers of electric vehicles in the form of an upfront reduction in the purchase price of electric vehicles.

  • As per the information received from Department of Revenue, at present the GST rate on electric vehicles is 5%.
  • The GST rates are prescribed based on the recommendations of the GST Council.
  • Electric vehicles are already at the lowest rate slab of 5%.

Following steps have been taken by the Government for adoption of electric vehicles in the country:

  • The Government on 12th May, 2021 approved a Production Linked Incentive (PLI) scheme for manufacturing of Advanced Chemistry Cell (ACC) in the country in order to bring down prices of battery in the country.  Drop in battery price will result in cost reduction of electric vehicles.
  • GST on electric vehicles has been reduced from 12% to 5%; GST on chargers/ charging stations for electric vehicles has been reduced from 18% to 5%.
  • Ministry of Road Transport & Highways (MoRTH) announced that battery-operated vehicles will be given green license plates and be exempted from permit requirements.
  • MoRTH issued a notification advising states to waive road tax on EVs, which in turn will help reduce the initial cost of EVs.

About FAME India scheme:

FAME-India Scheme is implementing by Department of Heavy Industry in order to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same.

  • FAME India is a part of the National Electric Mobility Mission Plan.
  • Main thrust of FAME is to encourage electric vehicles by providing subsidies.
  • (FAME-India) Scheme proposes to give a push to electric vehicles (EVs) in public transport and seeks to encourage adoption of EVs by way of market creation and demand aggregation.
It is being implemented in two phases:
  1. Phase-I [Faster Adoption and Manufacturing of (Hybrid) & Electric Vehicles in India] from 1st April 2015.
  2. The Phase-II of the Faster Adoption and Manufacturing of (Hybrid) & Electric Vehicles.

FAME-India Scheme Phase-I:

  • Under Phase-I of FAME-India Scheme, the Government has supported about 500 charging stations to establish electric vehicle charging stations in the country.
  • Out of about 500 charging stations sanctioned under Phase-I of FAME-India Scheme about 230 charging stations have been installed.
  • Further, Energy Efficiency Services Limited (EESL) under the Ministry of Power has deployed 65 public charging stations for EVs in the country.

FAME-India Scheme Phase-II:

  • FAME 2 scheme aims to boost electric mobility and increase the number of electric vehicles in commercial fleets.
  • The government will provide the incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes.
  • The centre will invest in setting up charging stations, with the active participation of public sector units and private players.
  • Projects for charging infrastructure will include those needed to extend electrification for running vehicles such as pantograph charging and flash charging.
  • FAME 2 will also encourage interlinking of renewable energy sources with charging infrastructure.

Need of the hour:

  • India needs auto industry’s active participation to ease electric mobility transition. The auto and battery industries could collaborate to enhance customer awareness and promote domestic manufacturing.
  • Government needs to focus on a phased manufacturing plan to promote EVs, provide fiscal and non-fiscal incentives for phased manufacturing of EVs and batteries.