In 2015, government of India launched FAME India scheme, which stands for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles India, to promote and finance eco-friendly vehicles in the country by incentivising all vehicle segments including 2-wheelers, 3-wheelers and buses.
Now, in a recent development union Cabinet is considering to approve the proposal entailing financial support of Rs 9,381 crore in the second phase of the FAME India scheme (FAME II) spanning 5 years to boost adoption of energy-efficient vehicles in the country.
Under FAME II, the government is also considering establishing of a venture capital (VC) fund of ₹500 crore in order to support startups related to electric vehicles (EV) in India. According to Start Up team of Invest India, currently there are about 136 startups related to electric vehicles in India.
According to government sources, EV startups are not getting access to required finance, as financial institutions are reluctant to extend credit facilities to them because of their high-risk nature, which is the main reason for government to setup an exclusive VC fund for EV startups.
The principal purpose of the venture capital funding will be for development of zero emission vehicle and its component manufacturing base, making prototype to manufacturing and development of R&D, promoting work on alternative battery chemistries among others.
In an another good news, under proposed FAME II, large EV components such as motor, drive powertrain and controller which are currently not covered under modified special incentive package scheme (MSIPS) of the Ministry of Electronics and Information Technology have been proposed to be given capital investment subsidy at a rate of 20-25 per cent of capital investment.
However, it is to be noted that unlike phase-1 of FAME India Scheme, the FAME II will be restricted to new energy vehicles used for public transport (passenger vehicles), commercial purposes/vehicles and high-speed two-wheelers, and not for privately owned vehicles, which is a setback not only for India’s mission to go fully electric on roads by 2030 but to EV segment startups in the country too, as the chances that the vehicles these startups are manufacturing goes in larger consumer base will be diminished for not subsidizing the e-vehicles for private owners.
Notably, the government has dropped the idea of having an EV policy in place in the country. Earlier in February, transport minister Nitin Gadkari said that India does not need a dedicated EV policy. Instead the government may come out with an action plan.
In February only, the Society of Manufacturers of Electric Vehicles (SMEV), an industry body, has reportedly sought a meeting in this regard with Amitabh Kant, who is spearheading the centre’s EV action plan. Kant is also CEO of NITI Aayog, the policy think tank of govt. of India. SMEV also aproached PMO to get a clarity on EV policy in India, but then nothing substantial took off to date.
In a joint study conducted with the US-based Rocky Mountain Institute, the NITI Aayog last year identified incentives that would boost EV manufacturing in India.
The report, called as Transformative Mobility Solutions for India revealed India’s plan for electric cars and charging stations infrastructure.
In January 2017, a draft of India’s 10-year energy blueprint has revealed that the government is expecting as much as 57 percent of the country’s total electricity capacity to come from non-fossil fuel sources by the year 2027 – a significant increase over the India’s Paris agreement targets, which has asked the member countries to reach 40 percent non-fossil fuel electricity by the year 2030.
Via – Times of India | Top Image – WestCorkTimes.com