Current Affairs Brain Booster for UPSC & State PCS Examination

Topic: Subsidy on Electric Vehicles

Why in News?

• In view of the adoption of ecofriendly vehicles, the government of India has decided to increase subsidy for such vehicles by 50% under the Faster Adoption and Manufacturing of Electric Vehicles Phase II (FAME Phase II) scheme

Key Highlights

• The Centre has made a partial modification of the FAME Phase II , including increasing the demand incentive for electric two-wheelers to Rs. 15,000 per KWh from an earlier uniform subsidy of Rs. 10,000 per KWh for all EVs, including plug-in hybrids and strong hybrids except buses.
• The department of heavy industries also capped incentives for electric two-wheelers at 40% of the cost of vehicle, up from 20% earlier.

Significance

• The government’s continued support to drive adoption of EVs, with a keen focus on locally built electric two-wheelers will make India the manufacturing hub of EVs.
• The latest decision will bring down the prices of electric two-wheelers nearer to the IC (internal combustion engine) vehicles and remove one of the biggest blocks, of the high sticker price of electric two-wheelers.
• Together with the other important factors like extremely low running cost, low maintenance and zero emission, such price levels will surely spur a substantial demand for electric two-wheelers.

About FAME II

• The National Electric Mobility Mission Plan (NEMMP) 2020 is a National Mission document providing the vision and the roadmap for the faster adoption of electric vehicles and their manufacturing in the country.
• As part of the NEMMP 2020, Department of Heavy Industry formulated a Scheme viz. Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme in the year 2015 to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same.
• The Phase-I of the Scheme was extended from time to time and the last extension was allowed till 31st March, 2019.
• Presently, Phase-II of FAME India Scheme is being implemented for a period of 3 years from 01st April, 2019 with a total budgetary support of Rs. 10,000 crore.
• The scheme is intended to support the hybrid/electric vehicle market development and its manufacturing eco-system to achieve self-subsistence.
• The scheme has four focus areas i.e. Technology Development, Demand Creation, Pilot Project and Charging Infrastructure.