The Finance Ministry approves additional Rs 1,500 cr for the FAME-II programme

The Union Finance Ministry has sanctioned an additional Rs 1,500 crore for the second phase of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-II) programme, allaying fears that funds could run out before the scheme expires in March 2024 due to robust electric vehicle (EV) sales.

The budget was approved considering the objectives of the program in promoting electric vehicles. The government had utilized Rs 8,948 crore of the Rs 10,000 crore funds allocated under the scheme till December 26.

“This Department (DoE) approves the proposal to enhance budgetary allocation under FAME India Phase II from Rs 10,000 crore to Rs 11,500 crore till March 31, 2024,” a DoE order said.

By injecting additional resources, the government has increased its vehicle support targets for all categories except buses.

The target to support the number of vehicles was increased from 1.56 million to 1.74 million. The target for electric two-wheelers (e2Ws) was increased by 50 percent to 1.55 million, while for e3Ws it was reduced by 68 percent to 155,536. For e4W it was reduced by 13 percent to 30,461.

The target for buses was increased from 7,090 to 7,262 units.

Electric vehicle sales this year have witnessed a robust increase of over 45 percent by 2023, despite subsidy cuts and regulatory shifts. The total EV registration figure in 2023 was 1.5 million units, significantly higher than last year's mark of just over 1 million.

EV penetration in the country has increased to 6.3 percent in 2023 from 4.8 percent in 2022.

In the country, sales of electric vehicles have exceeded the million mark for two years in a row. By 2024, the industry expects sales of e2Ws alone to surpass one million.

The government is developing the next phase of the plan. And considerations about its mandatory nature are being discussed within the Ministry of Finance and the Prime Minister's Office.

First print: January 3, 2024 | 2:55 PM IST