Centre likely to discontinue second phase of Fame-II scheme after FY24

Instead of the Fame-II scheme, the benefits may be given through the production-linked incentive (PLI) scheme

The second phase of Rs 10,000 crore Faster Adoption and Manufacturing of Electric Vehicles in India (Fame-II) is likely to be discontinued after 2023-24, a report by the Economic Times (ET) said, citing officials aware of the matter. 

Instead of the scheme, it said the benefits might be given through the production-linked incentive (PLI) scheme. Fame-II was launched to support 1 million EV two-wheelers (E2W) and 7,000 electric buses (e-buses) in India.

Under Fame, companies can offer a discount of up to 40 per cent on the cost of locally manufactured vehicles and claim it as a subsidy from the government.

This comes as the ministry of heavy industries has launched an investigation into alleged misuse of subsidies by two-wheeler EV makers. 

The Centre has set aside Rs 25,938 crore under the PLI scheme for automobile and auto components. It was launched in September 2021. The benefits under the PLI scheme are given to manufacturers. 

"The PLI support for ACC, automobile, and auto component industry will start getting disbursed from FY24 and gain momentum in subsequent years. These will make manufacturing costs of all vehicles, including EVs, cheaper in the country," the official aware of the matter told ET.

Around 115 companies have filed an application under the scheme. According to ET, the PLI programme has been successful in attracting proposed investments in manufacturing automobiles and components of Rs 74,850 crore, of which Rs 45,016 crore is from approved applicants under the Champion OEM Incentive Scheme.