Centre freezes subsidy of EV makers for violating PMP norms under FAME-II

Under the FAME-II scheme, the government releases incentives for various categories of EVs to OEMs. It has an outlay of Rs 10,000 crore

The centre has put subsidies on several electric vehicles (EV) original equipment manufacturers (OEMs) for violating the government's phased manufacturing plan (PMP). The PMP is important eligibility for availing incentives under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme, according to a report by Mint. 

The irregularities were found by the department of heavy industries. The report quoted the department's secretary Arun Goel as saying that it is implementing a system to introduce traceability in the way manufacturers share their records related to the domestic value addition (DVA). 

"We got complaints that some OEMs are not adhering to the PMP rules. Our suspicions were corroborated by spot visits. The contents of the complaints were found to be correct to some extent," Goel told Mint.

The Mint further stated that if the OEMs can prove that the DVA criteria are met, the subsidies will be released. 

Under the FAME-II scheme, the government releases incentives for various categories of EVs. It has an outlay of Rs 10,000 crore. In 2021, the government extended the deadline of the scheme to March 2024. 

The PMP helps EV manufacturers to lower the price of the vehicles. It provides a localisation deadline for various components of EV. 

The investigation was initiated after the government received complaints that several OEMs had been claiming the subsidies without meeting the DVA requirements.