Business Standard

Centre planning to stop subsidies of firms found violating FAME-II norms

Companies may be debarred from availing subsidy under FAME-II and also return the subsidy availed on the sale of vehicles in the last 15 months

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BS Web Team New Delhi

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The companies that have been found wrongfully claiming subsidies under the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme may be debarred from availing of them in the future and may also have to forego sops on electric vehicles (EVs) sold in the last 15 months, The Economic Times (ET) reported on Tuesday.

The Centre is considering strict action against the companies found to be violating local sourcing norms. The list includes names like Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, AMO Mobility and Lohia Auto, the report said. The nodal agency for the scheme, the Ministry of Heavy Industries (MHI), is discussing the option of disbarment with other departments.

Last month, the Centre had sent recovery notices worth Rs 500 crore to these companies.  

The ET report added that the Centre has received 1.05 million claims for incentives from the companies registered under FAME-II. Of this, it has not approved claims of 400,000 electric two-wheelers.

The subsidy disbursal of Rs 1,400 crore was suspended earlier this year by the Centre pending the completion of enquiries by testing agencies Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology (iCAT). The main issue was sourcing the parts from China and assembling them here.

Earlier, Business Standard reported that against the backdrop of a reduction in incentives by the Centre, the electric mobility segment in India witnessed a slowdown in the first 15 days of June. Average daily sales volumes of electric two-wheelers (e2W) declined by over 62 per cent from May. Daily sales of electric three-wheelers and four-wheelers, on the other hand, witnessed an uptick.

From 3,395 units sold per day in May, the volume slipped to 1,271 units in June, shows data on the VAHAN portal of the Ministry of Road Transport and Highways (MoRTH). Sales of e2W made 7.73 per cent of the overall 1,497,956 two-wheelers dispatched last month. They are now down to 2.65 per cent in June, so far.

Daily sales of petrol two-wheelers rose to 46,755 units in June from 44,926 units in May. Industry players say the decline in e2W sales is due to the reduction in incentives under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) scheme and the ongoing investigation into the alleged deviation from the phased manufacturing programme guidelines.

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First Published: Jun 20 2023 | 12:58 PM IST

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