The Union Cabinet may decide on the roll out of the FAME India scheme's second phase to boost adoption of energy-efficient vehicles in a month's time, Union Heavy Industries Minister Anant Geete said.
The second phase of the scheme spanning five years from 2018-19 to 2022-23 is likely to entail financial support of Rs 9,381 crore and target new energy vehicles used for public transport, commercial purposes and high-speed two-wheelers, official sources said.
According to the sources, the scheme may also entail provision for establishment of a Rs 500 crore venture capital fund related to electric vehicles to boost high-risk startups and foster innovation and entrepreneurship.
The main thrust of the venture capital funding will be for development of zero emission vehicles and its component manufacturing base, making prototype to manufacturing and development of R&D, and promoting work on alternative battery chemistries, among others.
The government had extended the phase I of the scheme entailing incentives for mass adoption of electric and hybrid vehicles by six months till September-end or till its second phase is approved, whichever is earlier.
The phase I of the scheme was initially proposed for two years till March 31, 2017 but was extended twice for six months up to March 31, 2018.
The Heavy Industry Ministry had earlier circulated a draft Cabinet note entailing the details of the proposed scheme among various related government departments, including power, new and renewable energy, road transport and highways, finance and others.
With an aim to promote eco-friendly vehicles, the government had launched the Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) scheme in 2015, offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.
Under FAME II, demand aggregation will be attempted for city buses, electric three-wheelers and electric four-wheeler taxi segment to bring down the cost of vehicles.
Moreover, large EV components such as motor, drive powertrain and controller, which are currently not covered under modified special incentive package scheme (MSIPS) of the Ministry of Electronics and Information Technology have been proposed to be given capital investment subsidy at a rate of 20-25 per cent of capital investment under FAME II.
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