Centre plans to end the FAME scheme

Why in news:

• The government is contemplating to put an end to the FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy scheme when FAME II comes to an end in March, 2024.
• Government is planning to replace the FAME scheme with a modified production-linked incentive (PLI) instead of introducing a third phase of the scheme or FAME III.
• Inter-ministerial discussions are of the opinion that the modified PLI scheme may be better suited for auto sector, which will also be applicable for passenger electric vehicles.
• The FAME II scheme is currently applicable to two-wheelers, three-wheelers, and four-wheelers which are used for public transport.

About FAME scheme:

• FAME or Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India is a subsidy scheme.
• The FAME India phase-I scheme was initially launched on April 1, 2015 which was operated until March 31, 2019.
• It’s originally part of the National Electric Mobility Mission Plan (NEMMP) – 2020.
• The nodal ministry for the scheme is department of heavy industries, ministry of heavy industries.
• The scheme focuses mainly on four main areas ans they are:

1. technological development,
2. generating demand,
3. piloting projects,
4. and building charging infrastructure.

• The phase II of the scheme started on April 1, 2019, for a period of three years, which was further extended for a period of two years up to March 31, 2024.

• The FAME II aims to provide incentives to buyers (end users or consumers) of electric vehicles to enable wider adoption, which may be encouraged as a purchase price.
• The FAME-II scheme is exclusively targeted for the public and commercial transport in the segments of electric three-wheelers (e-3W), electric four-wheelers (e-4W) and electric buses.
• The benefit of the incentive is also available to the privately owned registered electric two-wheelers (e-2W) and charging stations.

The main aims and objectives of the FAME India Scheme:

• Reducing the country’s vehicular emissions and bring down the levels of air pollution.
• Accelerating the adoption of electric vehicles by lessening the initial investment.
• Encouraging the electric vehicle manufacturers, suppliers, and related providers to produce a greater number of electric automobiles in the country.
• Developing the electric charging infrastructure across the country.
• Converting the 30% of overall transportation to electric vehicles by 2030.

Positive outcomes of FAME India Scheme:

The benefits of the FAME India Scheme are as follows –

• Environmental pollution will be significantly reduced due to the reduction of vehicular emissions.
• Schemes like this will help India to achieve the target of net zero emission of carbon before 2070.
• The dependence on oil imports will be overcome which reduces the current account deficit.
• It will provide the eco-friendly public transportation for citizens which promotes good health for people and environment too.