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DAILY NEWS ANALYSIS

  • 06 April, 2023

  • 6 Min Read

Extend FAME II Subsidy

Extend FAME II Subsidy

  • The parliamentary standing committee on heavy industry brought attention to the fact that Phase 2 of the FAME programme to subsidise electric vehicles only met 51.96% of its goal.
  • In related events, the Union Ministry of Heavy Industries' Committee on Estimates (2022-23) for the examination of electric vehicle policy proposed an extension of the FAME II programme.

About

  • The Union Ministry of Heavy Industries' Committee on Estimates (2022-23) for the examination of its electric vehicle policy proposed extending the FAME II programme, which was set to expire in 2024.
  • Finance Minister Nirmala Sitharaman doubled the FAME II funding in the newly released Union Budget but didn't extend the timeline.

Issue highlighted by the committee

  • Air pollution and greenhouse gas emissions are brought on by a heavy reliance on oil imports and ICE automobiles.
  • sluggish progress towards both financial and athletic goals.
  • Only a few cities have been authorised to have EV charging stations.
  • If government subsidies were to end, the cost of EVs would drastically increase.
  • The committee discovered that several startups are also operating in this industry, and that if FAME II is withdrawn, they may have to close.
  • Encouraging the usage of EVs can help the environment, public health, economics, and technical innovation in a variety of ways. Via a number of programmes and incentives, India has been attempting to promote the usage of electric vehicles (EV).

Suggestion by the committee

  • Increase the infrastructure for charging
  • The programme should be expanded with new objectives, rewards, and controls.
  • Increase the focus on execution and include private automobiles in the subsidies.
  • The GoI needs to demonstrate its belief in the Indian EV market and "plug in" the capital sourcing holes through a successful subsidy programme like the soon-to-expire FAME II.
  • It would be beneficial at this stage to study a leading electric transport economy, such as China, and learn from their experience.
  • Increase the infrastructure for charging.

Challanges

  • Because EVs are more expensive up front than ICE cars, EV adoption has been minimal. This was due to the expensive lithium-ion batteries, which accounted for 30–40% of the vehicle's cost.
  • Yet, compared to traditional automobiles, battery-powered vehicles have reduced operating costs.
  • Only a few cities have been authorised to have EV charging stations.

About fame

  • Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) is a programme that was started in 2015 by the Ministry of Heavy Industries and Public Enterprises. The fundamental reason for initiating this programme was to encourage the development of these cars and eco-friendly automobiles, including electric and hybrid vehicles

  • The plan was launched in two stages. Phase I began in 2015 and was finished on March 31, 2019. The FAME Scheme's Phase-I initially began on April 1, 2015, for a period of two years, but was later extended through March 31, 2019.

National electric moblity mission 2020

  • It is a National Mission document that was started with the goal of increasing the use of electric vehicles in the nation. In order to give the people a practical and environmentally beneficial transportation choice, the plan was developed to conserve the nation's fuel
  • The Indian automobile industry's goal of selling more electric vehicles will also be accomplished with the aid of this programme. The automobile industry projected to sell 6-7 million hybrid and electric vehicles through this programme by the end of the year.

Source: Down To Earth


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