he Ministry of Heavy Industries recently made an important announcement regarding the subsidy provided for electric two-wheelers in India. Effective from 1st June, the subsidy would be reduced to ?10,000 per kilowatt hour (kWh), down from the current ?15,000. This change will be applicable to all electric two-wheelers registered on or after the specified date. To understand the context behind this decision, let’s delve into the background of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and its subsequent phases.
FAME I: Encouraging Electric and Hybrid Vehicle Adoption
The FAME scheme was initially launched in 2015 as a part of the National Electric Mobility Mission. The primary objective of FAME I was to stimulate the adoption of electric and hybrid vehicles in India. To achieve this, the scheme provided financial support in the form of subsidies to prospective buyers. By incentivizing electric vehicle purchases, the government aimed to reduce pollution, decrease dependency on fossil fuels, and promote sustainable transportation alternatives.
FAME II: Expanding the Horizon of Electric Vehicle Incentives
Building on the success of FAME I, the government introduced the second phase of the scheme known as FAME II in April 2019. FAME II has been extended until 31st March 2024 and has a total outlay of ?10,000 crore. The scope of FAME II extends beyond electric two-wheelers and encompasses electric three-wheelers, electric four-wheelers, electric buses, and privately owned registered electric two-wheelers.
Key Objectives of FAME II:
- Boosting Demand for Electric Vehicles:
- Supporting the deployment of 7,000 e-buses to promote sustainable public transportation.
- Encouraging the adoption of 500,000 electric three-wheelers, reducing pollution caused by traditional auto-rickshaws.
- Facilitating the purchase of 55,000 electric cars, promoting the shift towards cleaner and greener personal vehicles.
- Aim to enable the acquisition of 1 million electric two-wheelers, transforming the landscape of two-wheeler mobility in India.
- Incentives and Subsidies:
- Providing financial support to electric vehicle manufacturers and their supply chain to enhance production capacity and promote domestic manufacturing.
- Offering subsidies for the purchase of electric vehicles to make them more affordable and attractive to consumers.
- Encouraging the establishment of charging infrastructure to alleviate range anxiety and enhance the convenience of owning an electric vehicle.
Adjustments in Electric Two-Wheeler Subsidies:
The recent reduction in the subsidy for electric two-wheelers, from ?15,000 to ?10,000 per kilowatt hour, aims to ensure the sustainable growth of the electric vehicle industry. The government may have made this decision based on factors such as the increased affordability of electric two-wheelers and the need to allocate resources effectively across different segments of the electric vehicle market.
Important Points:
- Ministry of Heavy Industries reduces subsidy for electric two-wheelers: 💰
- Reduced to ?10,000 per kWh from ?15,000.
- Applicable to electric two-wheelers registered on or after 1st June.
- FAME I (Faster Adoption and Manufacturing of Electric Vehicles):
- Launched in 2015 under the National Electric Mobility Mission. 🚗⚡
- Aimed to encourage electric and hybrid vehicle purchase.
- Provided financial support through subsidies.
- FAME II:
- Second phase launched in April 2019, extended until 31st March 2024. 🔌
- Total outlay of ?10,000 crore.
- Incentives for electric three-wheelers, electric four-wheelers, electric buses, and privately owned registered electric two-wheelers.
- Objective: Generate demand for 7,000 e-buses, 500,000 electric three-wheelers, 55,000 electric cars, and 1 million electric two-wheelers. 🚌🛵🚗
- Adjustments in Electric Two-Wheeler Subsidies:
- Recent reduction in subsidy to ensure sustainable growth of the electric vehicle industry. ⚖️
- Possible reasons: increased affordability of electric two-wheelers, effective allocation of resources.
- Objectives of FAME II:
- Boosting demand for electric vehicles:
- Deploying 7,000 e-buses.
- Adopting 500,000 electric three-wheelers.
- Purchasing 55,000 electric cars.
- Acquiring 1 million electric two-wheelers. 🚌🛵🚗
- Boosting demand for electric vehicles:
- Incentives and subsidies:
- Support for manufacturers and supply chain.
- Financial assistance for electric vehicle purchases.
- Promotion of charging infrastructure. ⚡🏢
MCQs about FAME Scheme and Subsidy Adjustments in India
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What is the main objective of the FAME II scheme?
A. Encouraging the adoption of electric three-wheelers
B. Promoting the purchase of electric cars
C. Supporting the deployment of e-buses
D. All of the above
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Which phase of the FAME scheme provides incentives for electric buses?
A. FAME I
B. FAME II
C. FAME III
D. FAME IV
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What is the rationale behind the reduction in subsidies for electric two-wheelers?
A. To discourage the purchase of electric two-wheelers
B. To increase the affordability of electric two-wheelers
C. To allocate resources effectively across different segments
D. To promote fossil fuel consumption
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