Government set to OK Rs 3,500 crore e-vehicle sop

NEW DELHI: The government is set to approve a subsidy of around Rs 3,500 crore for promoting electric vehicles over the next five years as part of the FAME 2 plan, while limiting support only to government-run buses and denying benefit currently available to private vehicles, including hybrids.

The plan leaves out private cars, cab aggregators, two-wheelers and even hybrid vehicles from the government’s financial incentive package that is aimed at supporting green mobility initiatives.

On Wednesday, a committee headed by expenditure secretary A N Jha approved the allocation against the demand of around Rs 12,000 crore by the heavy industries ministry as it pushed the scheme as a major thrust to electric mobility in the country under the second phase of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.

Officials defended the plan, arguing the decision to extend direct subsidy only to procure governmentowned buses was taken to support larger clean public mobility solutions, rather than incentivise private cars.

On June 22, TOI reported the government’s move to scrap cash incentives currently offered to buyers of electric cars. The heavy industries department had sought allocation of Rs 8,300 crore as incentive to push the demand of electric vehicles, particularly for buying electric vehicles.

“There was a view that the financial incentive should be provided only to public transport. While the original proposal had sought Rs 5,000 crore for buses, now it may reduce to less than Rs 1,500 crore,” an official said.

The plan will now have to be endorsed by the Union Cabinet with officials suggesting that there may be “some tweaks”.

Officials said the plan approved by the expenditure finance committee includes a provision for providing incentives of about Rs 1,000 crore for setting up of charging stations and specific allocations for creating a venture capital fund and for carrying out research and development in this sector.

While officials in the automobile sector claimed that they supported the government’s proposal to give a big push to clean public transport, they expressed dismay at the exclusion of hybrids.

Companies say that hybrids are an “intermediate” technology before the rollout of full electrics, and “thus need to be supported through subsidies”.

Mozaffar EtezadiFar

Founder at Energykade
Mozaffar owns degrees in electrical engineering as BSc and power management as MSc. He has worked in fields of energy and e-commerce. He believes that energy and IT can help each other to save more energy and our planet. So here is energykade...
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