 "electric vehicles")
The Union Finance Ministry has sanctioned an additional Rs 1,500 crore for the second phase of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-II) programme, addressing fears that funds could run out before the scheme ends in March 2024 due to robust electric vehicle (EV) sales.
A proposal to increase the outlay for FAME-II from Rs 10,000 crore to Rs 11,500 crore was approved by the department of expenditure (DoE) on January 2.
The budget was approved considering the scheme’s objectives in promoting EVs. The government had till December 26 utilised Rs 8,948 crore of the Rs 10,000 crore funds allocated under the scheme.
“This Department (DoE) conveys its approval for the proposal seeking enhancement in the budget allocation under FAME India Phase II from Rs 10,000 crore to Rs 11,500 crore until March 31, 2024,” said a DoE order.
By injecting supplementary funds, the government has raised its vehicle support objectives for all categories except buses.
The target to support the number of vehicles was raised from 1.56 million to 1.74 million. The target for electric two-wheelers (e2Ws) was raised by 50 per cent to 1.55 million, while for e3Ws it was reduced by 68 per cent to 155,536. It was reduced for e4W by 13 per cent to 30,461.
The target for buses was increased to 7,262 units from 7,090.
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EV sales this year have witnessed a robust increase of over 45 per cent in 2023, notwithstanding the subsidy cuts and regulatory shifts. Total EV registration figure in 2023 touched 1.5 million units, significantly higher than last year’s score of a little over 1 million.
EV penetration in the country increased to 6.3 per cent in 2023 against 4.8 per cent in 2022.
The country has seen EV sales exceed one million for two consecutive years. In 2024, the industry anticipates that sales of e2Ws alone will surpass the one-million mark.
The government is engaged in developing the forthcoming phase of the scheme. And, considerations about its mandatory nature are being discussed within the Ministry of Finance and the Prime Minister’s Office.
