'New EV subsidy scheme under FAME 3 will not be included in Budget 2024', Union Minister clarifies position
EV Subsidy: The central government is yet to decide on its new EV subsidy policy under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) III.
The central government is yet to work out its new EV subsidy policy under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles III. In March, the deadline for the subsidy scheme brought in to encourage electric vehicle sales in India concluded, while the Centre announced an increase in expenditure to benefit EV buyers.
The new scheme for the EV subsidy remains under deliberation as of now under the FAME III regime, and its chances of getting squeezed into the processes lined up for the Union Budget 2024 on July 23 are slim. FAME III, according to Union Minister HD Kumaraswamy, may be brought into effect in the very near future.
The FAME EV subsidy scheme was launched in 2015. Following two years, the FAME II scheme came into action.
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.
