'New EV subsidy scheme under FAME 3 will not be included in Budget 2024', Union Minister clarifies position

The scheme, which ended on March 31 this year, was started in 2019 to offer subsidies on electric vehicles sold in India. In the first phase of the scheme, the Centre had earmarked Rs 529 crore. For a period of three years, the amount used for subsidizing in the second phase was Rs 10,000 crore.

The Centre had clarified earlier that the EV subsidy under FAME II would be available for electric vehicles sold till March 31 or till funds are exhausted. The government had also increased the outlay of the EV subsidy scheme to Rs 11,500 crore.

The finalization of the FAME III scheme is yet to be finalized, the Union Minister said during an event organized by the Society of Indian Automobile Manufacturers on Tuesday. And quite unlikely to be announced with the upcoming budget session.

"The preparatory work is already on. Recommendations from all ministries have come about how to implement this FAME III programme.It will be implemented in the next few months or a few days. It is in the final stage,"he said.

Finance Minister Nirmala Sitharaman had flown in an interim budget allocation of Rs 2,671.33 crore for the EV subsidy scheme. He further reiterated that no decision has been made so far regarding the taxation rates of hybrid vehicles. As per the existing standards, electric vehicles are taxed at only 5 percent in India, while hybrids attract as much as up to 43 percent—a shade lower than the 48 percent levied on petrol cars. Gadkari, of course, had argued that while on one hand EVs are taxed at five per cent presently, the hybrids are levied up to 48 per cent and thus need rationalization so as to promote more climate-friendly vehicles.