New government likely to announce Rs 10,000 crore FAME 3 scheme

Gajanan Kashikar Published: June 07, 2024, 12:39 PM IST

The new government may possibly announce the third chapter of the Faster Adoption and Manufacturing of Electric Vehicles (FAME III) in its budget 2024 in the coming months with an expected budget of approximately Rs 10,000 crore. It will provide subsidies for various electric vehicles (EVs). Unlike the FAME II, which had a duration of five years, the FAME 3 could have an initial implementation period of two years.

In 2014, the Centre introduced FAME I and dedicated a budget of Rs 895 crore for the period spanning from 2015 to 2019. The aim of the FAME scheme is to support and promote local manufacturing and sales of electric vehicles (EVs) in order to provide incentives to customers. Following that, the second edition of the FAME scheme was approved and put into effect in 2019, with a budget allocation of Rs 10,000 crore for a duration of three years.

In fact, the new FAME III scheme will likely be identical to the FAME II. The second edition ended in March this year. For example, the previous edition of the scheme offered a 15 per cent incentive on electric scooters. But it is unknown yet whether the FAME III will offer incentives for electric cars. Nevertheless, a potential scenario in the upcoming new FAME scheme could involve the inclusion of hybrid cars. Like the price cap for electric cars, there might be a set value for automakers to be eligible for the incentives.