 "Extend FAME-II, set deadline for polluting vehicles: Parliament committee")
The Parliamentary Standing Committee on Industry on Wednesday recommended a slew of measures to boost the adoption of electric vehicles in the country and recommended the extension of the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) India Scheme by three years.
In its report on the Promotion of Electric Vehicles, the committee emphasised including private four-wheelers and quadricycles in the scheme, alongside mandating EVs in public transport, logistics, and delivery sectors.
“In order to facilitate the transition momentum to electric mobility, broaden the scope and extend the FAME-II Scheme for at least 3 more years. In order to decarbonise the transport sector, efforts should be made to set a deadline for making the transport sector in the country mandatorily electric,” the 324th report pertaining to the Ministry of Heavy Industries (MHI) said.
The committee raised concerns about the MHI’s electric two-wheeler subsidy cuts in June, urging its restoration. Additionally, addressing high ownership costs as a significant hurdle, the committee suggested a reduction in goods and services tax to mitigate this expense.
“Government should explore the possibility of shrinking further the GST on Lithium-ion batteries,” it said, adding “There is a need to address the issue of GST for manufacturers as well to reduce the high cost.”
The committee also recommended the MHI conduct a study regarding the feasibility of battery standardisation and formulate a stable battery swapping policy. The move is aimed at increasing customer confidence and attracting foreign direct investment in the sector.
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To maximise the environmental decarbonsation benefits of EVs, the establishment of solar-powered EV charging stations is essential, the committee said.
Noting the challenges associated with financing the EVs, it suggested bringing it under the Priority Sector Lending (PSL) category until the 30 per cent penetration target fixed for 2030 is achieved, to accelerate India’s commitment towards net-zero emissions.
It also highlighted how frequent alterations in EV policies generate uncertainty within the market and the EV industry and recommended stable policy.
“Such inconsistencies can instil doubt in the minds of people and end users about the government's actions, potentially hindering the growth of the EV industry. A stable policy framework would provide confidence to stakeholders and ensure a conducive atmosphere for the growth of electric mobility initiatives,” the report said.
The committee acknowledges that pollution remains a significant concern and emphasised the importance of transitioning toward sustainable practices. To expedite the widespread adoption of electric vehicles (EVs), the committee suggests extending the provision under Section 80EEB.
“This extension, if implemented until at least March 31, 2025, would offer incentives or benefits that encourage and support individuals or entities to invest in EVs. By extending this provision, it aims to stimulate and accelerate the shift towards electric vehicles, which are environmentally friendly and contribute to reducing pollution. This extension could potentially incentivise more people to opt for EVs,” it suggested.