Hero Electric, Benling India barred from all EV incentive schemes

MHI to write to FinMin on a wider ban in all government schemes

The Ministry of Heavy Industries (MHI) has debarred Hero Electric and Benling India, two defaulters under its flagship Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) scheme, from participating in any of its incentive programmes in future.

This action follows the ministry’s findings that the phased manufacturing programme (PMP) guidelines were violated by these two companies, senior officials told Business Standard. The PMP guidelines under the flagship FAME scheme are designed to increase domestic value addition.
 

“Hero Electric and Benling India have been debarred from all schemes of the MHI for two years under the General Financial Rules (GFRs) 2017,” a senior government official said.
 

According to official estimates, the government seeks to recover around Rs 200 crore from the two.

 

A spokesperson for Hero Electric stated: “Since the matter is sub-judice, we cannot comment on this.”
 

The query sent to Benling remained unanswered till the time of going to press.
 

The ministry had deregistered all violators — Hero Electric, Okinawa Autotech, Ampere Vehicles (Greaves Cotton), Benling India, Revolt Intellicorp, and Amo Mobility — from the FAME scheme in May last year. These six original equipment manufacturers (OEMs) were asked to pay back around Rs 469 crore.
 

Of the six, three — Amo Mobility, Greaves Electric, and Revolt Intellicorp — returned the subsidies with interest. Hero Electric, Okinawa Autotech, and Benling India did not refund the incentives and were consequently deregistered in October/November last year.

According to the data from the MHI, Hero Electric claimed Rs 133 crore, Okinawa Rs 116 crore, and Benling Rs 48 crore under second phase of the FAME scheme.

The scheme subsidised the cost of selling electric vehicles by select players. The companies allegedly defaulted on the subsidy amount by not adhering to the scheme guidelines. 

Okinawa Autotech is the only defaulter not deregistered from the scheme because it has moved Delhi High Court.

Hero Electric has approached the Punjab and Haryana High Court, seeking relief from the recovery of subsidies taken under the government's flagship scheme to promote electric mobility.

The MHI is also preparing to give a proposal to the Ministry of Finance on deregistering these companies from any scheme of a central ministry. 

Hero Electric’s legal stand in its court filing says instructions regarding indigenisation and localisation were not elaborated in the FAME policy notifications and PMP guidelines.

The debarment comes days after a high-level government panel determined that the companies knowingly violated the “very clear” guidelines of the FAME subsidy scheme.