FAME-II subsidy violation: Hero Electric opposes Rs 130 cr refund demand

In a meeting with officials of the DHI, the company has said the period for which the government is demanding a refund of subsidies of Rs 130 crore does not apply to it

The conflict between Hero Electric and the government has intensified.

In a meeting with officials of the Ministry of Heavy Industries (MHI), the company has said the period for which the government is demanding a refund of subsidies of Rs 130 crore does not apply to it.

However, the firm is willing to offer Rs 8 crore for a brief period regarding which there is a difference of opinion between the two parties, according to a senior executive of the company.

“We operated under certifications provided by the MHI during this period, so our situation is unique,” he added.

Responding to Hero Electric’s offer, a high-ranking MHI official said: “While we have heard their (the company’s) case, their offer of Rs 8 crore and then a large rebate on the rest is unacceptable to us.”

The government has issued notices to seven companies — Hero Electric, Okinawa, Ampere, Revolt, Benling India, Amo Mobility, and Lohia Auto — for not adhering to localisation norms under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India Phase-II (FAME-II) subsidy scheme. These companies have been asked to return subsidies totalling Rs 469 crore.

Revolt India, an electric bike manufacturer, has refunded Rs 47 crore to the government as instructed.

Anjali Rattan, managing director of Revolt, confirmed the firm’s compliance.

“We have returned the subsidy as we wish to move forward and are optimistic that FAME-II subsidies will be reinstated for us.”

The MHI has warned non-compliant companies could face legal action and would be ineligible for future subsidy schemes. A meeting is scheduled for next week between Ampere and the government to discuss the same issue. A spokesperson for Ampere declined to comment on the matter.

Simultaneously, the Society of Manufacturers of Electric Vehicles (SMEV) has written to M N Pandey, minister of heavy industries, protesting the ministry’s selective meetings with original equipment manufacturers (OEMs) to persuade them to return the subsidies.

The letter says such actions are both legally and logically unfounded.

The SMEV urged the government to hold a comprehensive meeting involving all affected parties to find a “fair and mutually acceptable resolution”.

It suggested extending the 50 per cent localisation deadline, initially set for 2021, to Q3 2022. The government has not yet acceded to either of the two.

At odds
 

• Ministry of Heavy Industries (MHI) holds meeting with Hero Electric
• The company argues that the period for which the Centre is demanding a refund does not apply to it 
• But it is willing to offer Rs 8 cr for a brief period regarding which there is a difference of opinion 
• Company’s offer ‘unacceptable’ to us, says MHI official