FAME India Scheme
FAME India Scheme
With the aim to promote the manufacture of electric and hybrid vehicle technology as well as to ensure the sustainable growth of the same, the Department of Heavy Industry has implemented the Faster Adoption and Manufacture of Electric (and Hybrid) Vehicles in India. Also known as the FAME India Scheme, it proposes to push the usage of electric and hybrid vehicles for public transport and aims to encourage the adoption of the same through market creation and demand aggregation. The Government of India has declared an outlay of INR 10,000 Crores for the Scheme, and the same has been progressing every year. This article talks about the FAME India Scheme and the various essentials one should know about the same.
The Department of Heavy Industry launched the Faster Adoption and Manufacture of Electric (and Hybrid) Vehicles in India Scheme/FAME India Scheme for the promotion of electric and hybrid vehicles with an outlay of INR 795 Crores in the year 2015. Initially, Phase I of the Scheme was approved for 2 years starting from April of 2015. However, the Scheme has been extended over time with the latest extension declared in March of 2019.
Accordingly, the Phase I of the Scheme for Faster Adoption and Manufacture of Electric (and Hybrid) Vehicles in India/FAME India Scheme was reviewed and the Department of Heavy Industry has declared the Phase II of the same. With the approval of the Union Cabinet, the FAME India Phase II will be executed over 3 years starting from the April of 2019. The main aim of Phase II is to quicken the adoption of electric mobility and the development of its manufacturing ecosystem in India.
General Parameters of the Scheme
Phase II of FAME India Scheme is to be implemented over 3 years starting from the 1st of April, 2019. The second phase of this Scheme focuses on the faster adoption of electric mobility and the development of its manufacturing ecosystem in India.
Project Implementation and Sanctioning Committee (PISC)
For this purpose, an inter-ministerial empowered committee called the Project Implementation, and Sanctioning Committee (PISC) has been constituted. The PISC will monitor, sanction and implement the Scheme as per the provided guidelines by the Government and will be headed by the Secretary of the Department of Heavy Industry.
The Committee will have the following powers:
- To sanction assistance for projects under the Scheme.
- To modify parameters for various components and sub-components of the Scheme.
- To modify the outlay depending on the emerging requirements in order to achieve the overall objective of enhancing and promoting the coverage of e-mobility.
- To formulate other scheme parameters for the smooth implementation of the Scheme.
- To resolve issues that occur during the implementation of the Scheme.
Major Verticles of the Scheme
The Scheme has been proposed to be implemented through the following significant verticles.
- Demand Incentives
- Establishment of a network of Charging Stations
- Administration of the Scheme including activities related to Information, Education and Communication.
The following is the breakup of fund allocation for the following years. This is component-wise for a specific duration of the Scheme.
|Serial Number||Component||2019-20||2020-21||2021-22||Total Fund Requirement|
|3||Administrative Expenditure including Publicity and ICE Activities||12||13||13||38|
|Total for Phase II of FAME India Scheme||1134||5000||3500||9634|
|4||Committed Expenditure of Phase I||366||0||0||366|
Scheme Parameter: Demand Incentives
Demand incentive is an essential component of the FAME India Scheme. This component would directly contribute and enhance the demand for electric vehicles, as well as reducing the cost of acquisition of such vehicles. This incentive will be available for every consumer in the form of an upfront reduced purchase price of electric and hybrid vehicles. This would be reimbursed by the Government to the Original Equipment Manufacturers (OEMs) while enabling more extensive adoption of these vehicles.
The following categories of vehicles are eligible for demand incentives:
- Buses of Electric Vehicle Technology
- Four Wheelers of Electric, Plug-in Hybrid and Strong Hybrid kinds.
- Three-wheeler of Electric kind including registered e-Rickshaws.
- Electric Two-Wheelers
Keeping in view of the cost of batteries, the demand incentive would be based on the battery capacity of such vehicles. Depending on the market and technology trends in batteries, PISC may revise the incentives and target number of vehicles accordingly. As the Scheme is mainly formulated on offering affordable and environmentally-friendly public transportation means for the masses, the Scheme will be applicable to vehicles used for public transport and to those registered for commercial purposes in the 3W, 4W and Bus categories. Fortunately, privately-owned registered 2Ws will also be covered under this Scheme as a mass category. It should be noted that vehicles with advanced batteries satisfying a specific performance criterion will be eligible for the incentives only.
Quantum of Demand Incentives
The following are the various aspects of the demand incentives offered as a part of Phase II of the FAME India Scheme.
- To rationalise incentives across multiple segments and cross various vehicle technologies, it is proposed to extend the uniform demand incentive at INR 10,000 per KWh for all vehicles including PHEV and Strong Hybrid, but excluding Buses. This may be reviewed and revised by the PISC.
- To promote public transport, an initial uniform maximum demand incentives at INR 20,000 per KWh has been proposed. However, the amount for buses may further be subject to competitive bidding amongst OEMs.
- The incentives would be reviewed annually or as required by the PISC based on the price trends for various components, assemblies and market parameters like offtake of vehicles. It permits the Scheme to leverage the limited budgetary funds for more vehicles within the overall outlay in order to offer economies of scale to the industry for sustainable manufacturing.
- Demand Incentives would only be provided for electric buses on the operational expenditure model adopted by the State/City Transport Corporation.
Conditions to avail Demand Incentives
The following are the conditions that one has to fulfil in order to avail the Demand Incentives.
- In order to restrict high-end vehicles from availing these Demand Incentives by the Government, it has been proposed to restrict incentives to vehicles that are below a particular threshold in terms of its ex-factory price.
- Based on the offtake of the vehicle, the maximum incentive per vehicle is to be capped at a percentage of the cost of the vehicle. For example, the cap on incentives for buses will be 40% of the cost of the vehicle. For every other category, it will be 20% of the vehicle’s cost.
- To avail these Demand Incentives for any model manufactured by any OEM, the OEM has to be first be registered with the Department of Heavy Industry.
- Each vehicle model is required to satisfy minimum technical eligibility criteria with respect to the performance and efficiency of vehicles. This has to be tested by agencies notified under Rule 126 of the Central Motor Vehicle Rules by the Ministry of Road Transport and Highways.
- Every Hybrid or Electic Vehicle and its variants is required to meet the following qualifying criteria for the Demand Incentives:
- It has to manufactured in India and must have a particular percentage of localisation.
- It should meet the provisions stated in the Central Motor Vehicle Rules/CMVR with respect to type approval, classification, categorisation, definition, roadworthiness, registration, and more.
- It should have a certificate of FAME India Phase II from recognised testing agencies.
- It should have a minimum of 3-year comprehensive warranty, including that of its battery from the respective manufacturer. It should also have adequate facilities for after-sales services for the life of the vehicle.
- It should be fitted with suitable monitoring devices in order to learn the mileage of the vehicle and to determine the total fuel savings on a real-time basis.
- The vehicle should display a sticker indicating that it has been purchased under this Scheme.
Disbursement of Demand Incentives
The Demand Incentives for every segment, excluding buses, will be disbursed through an e-enabled framework and mechanism established by DHI. The OEMs will be required to submit their claims for reimbursement of demand incentives monthly to the DHI for settlements. The disbursement of these funds will be called the Demand Incentive Delivery Mechanism (DIDM). Similarly, detailed guidelines and mechanism for the deployment of electric buses and disbursement of demand incentives through State Transport Undertakings will be notified accordingly.
The following would be implemented for the proper functioning of the FAME India Scheme.
- For smooth operations and the implementation of the Scheme, knowledge partners or technical expertise and other logistic support will be put into place.
- A suitable IEC program will be undertaken to create consumer awareness and promotion of the Scheme. It would be executed through education, training, publicity, organisation of business meets/ seminars/ conferences/ symposia, and so on, by the DHI, Industry Association, Voluntary Organisations and more.
- All the projects under FAME India Scheme Phase I will continue as per the terms and conditions at the time of sanction.
- The Department of Heavy Industry will be responsible for the overall implementation of the FAME India Scheme and for removing any obstacles if any arise during the implementation of the same.