The second phase of the much-awaited and much-delayed Faster Adoption and Manufacturing of (hybrid) Electric vehicles (FAME) scheme will finally come into force from April 1, 2019 with the Union Cabinet on Thursday giving its approval for the initiative. The scheme will be in effect for a period of three years at a proposed budget of Rs 10,000 crore. “The scheme with total outlay of Rs 10,000 crores over the period of three years will be implemented with effect from April 1, 2019,” finance minister Arun Jaitley said.
The scheme is the expanded version of the present scheme titled ‘FAME India 1’ which was launched in April 2015, with total outlay of just Rs 895 crore. The largely increased allocation for the new phase is a sign of the critical importance that India’s policy makers are currently placing on shifting to an all-electric Indian mobility sector quickly.
According to the government, phase two of the scheme plans to support ten lakhs electric two-wheelers, five lakhs electric three-wheelers, 55 thousands four-wheelers and 7,000 buses. The cabinet also noted that the main objective of the scheme is to encourage faster adoption of electric and hybrid vehicle by way of offering upfront incentive on the purchase of EVs and also by way of establishing a necessary charging Infrastructure for electric vehicles.
However, in phase two of the scheme, emphasis is on electrification of the public transportation that includes shared transport. The second phase will also not provide any incentive for passenger cars used for personal use. In the two-wheelers segment, however, the focus will be on the private vehicles. “Demand Incentives on operational expenditure mode for electric buses will be delivered through State/city transport corporation (STUs).
In 3W and 4W segment incentives will be applicable mainly to vehicles used for public transport or registered for commercial purposes,” the government said. Further, to encourage advanced technologies, the benefits of incentives will be extended to only those vehicles which are fitted with advanced batteries like a Lithium Ion. It also proposes for establishment of charging infrastructure, whereby about 2700 charging stations will be established in metros, other million-plus cities, smart cities and cities of hilly states across the country ensuring availability of at least one charging station in a grid of 3 km x 3 km.
According to Shubhranshu Patnaik, partner at Deloitte India, inclusion of buses, taxi and e-rickshaws under Fame 2 will play a critical role to promote EVs. “The transition to electric buses is expected to not only help reduce carbon footprint but also save fuel. The enhancement of electric public transport seems to be the need of the hour in every city,” he said, adding that the high capital cost of electric buses require changes to conventional business models.