Lok Sabha Question No. 306 (UNSTARRED), answered on 2021-07-20
Subject: Financial Assistance under FAME India Scheme
Ministry: HEAVY INDUSTRIES
Asked by: Malook Nagar

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 306

ANSWERED ON 20.07.2021

## FINANCIAL ASSISTANCE UNDER FAME INDIA SCHEME

## 306. SHRI MALOOK NAGAR:

Will the Minister of HEAVY INDUSTRIES भारी उद्योग मंत्री be pleased to state:

- (a) the  details  of  the  section  of  the  society  provided  financial  assistance  under  the  Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) India Scheme;
- (b) the details and the number of people who received incentives of Rs. 3,300 to Rs. 61,000 for three-wheelers in Uttar Pradesh particularly in the constituency of Bijnor;
- (c) the process by which the manufacturers of hybrid battery vehicles can claim incentives at the end of the month; and
- (d) the time period to receive such amount?

## ANSWER

## THE MINISTER OF STATE FOR HEAVY INDUSTRIES (SHRI KRISHAN PAL GURJAR)

- (a): Under FAME India Scheme, financial assistance is being provided to the purchasers of e2W,  e-3W  &  e-4W  across  all  sections  of  the  society  as  per  the  notification  of  the  scheme (ANNEXURE - I).  The scheme is being implemented on pan India basis.
- (b): Under  the  scheme,  purchasers  of  48  numbers  of  electric  vehicles  amounting  to  a  total demand incentive of about Rs. 13 lakhs have been incentivized in the district of Bijnore (UP) as on 15 th July, 2021.
- (c) & (d): The demand Incentives under FAME-II scheme are given to consumers (buyers/ end users) in the form of upfront reduced purchase price of hybrid and electric vehicles.  Original Equipment  Manufacturers  (OEMs)  have  to  submit  the  reimbursement  claims  of  demand incentives once in a month within 120 days of sale of vehicles at dealer end.  After verification of claims,  Incentive  amount  is  reimbursed  to  the  OEMs.  The  details  for  delivery  of  Demand Incentives for OEMs under FAME-India Scheme Phase-II is attached as ANNEXURE-II.

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## MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (Department of Heavy Industry)

## NOTIFICATION

New Delhi, the 8th March 2019

S.O.  1300(E) .-Scheme  for  Faster  Adoption  and  Manufacturing  of  Electric  Vehicles  in  India  Phase  II (FAME India Phase II).

## Background:

1. Department of Heavy Industry had launched a scheme, namely Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India), for promotion of electric and hybrid vehicles with an outlay of Rs.795 Crore vide S.O. 830 (E) dated 13 th March 2015.
2. Phase I of the FAME India Scheme was initially approved for a period of 2 years, commencing from 1st April 2015. The scheme has been extended from time to time, with the present extension being up to 31st March 2019 and with an enhancement in outlay from Rs. 795 Crore to Rs. 895 Crore.
3. Para 11 of the Notification of Phase-I of FAME Scheme provides for review of Phase-I based on outcome and experience  gained  during  this  phase  as  well  as  with  inputs  from  stakeholders  for  implementation  with appropriate allocation of funds in the future.
4. Accordingly,  after  review  of  the  phase  I,  Department  of  Heavy  Industry  formulated  the  Scheme  for  Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) with the approval of Union Cabinet as per the scheme parameters given in subsequent paragraphs.

## Scheme Parameters: General:

5. The scheme is proposed to be implemented over a period of 3 years, w.e.f 1st April 2019, for faster adoption of electric mobility and development of its manufacturing eco-system in the country.
6. An  Inter-Ministerial  Empowered  Committee  -Project  Implementation  and  Sanctioning  Committee  (PISC)‖ headed by Secretary (Heavy Industry) shall be constituted for overall monitoring, sanctioning and implementation of the scheme as per the composition given in Annexure 1.
7. This committee will have the power to sanction assistance for projects under the scheme and modify parameters for  various  components  and  sub  components  of  the  scheme  including  their  outlay  depending  on  emerging requirements with the overall objective of enhancing the coverage of e-mobility. This committee will also be the competent authority to decide other scheme parameters for smooth implementation of the scheme as well as to resolve issues as may come during implementation.
8. The scheme is proposed to be implemented through the following verticals:
- a) Demand Incentives
- b) Establishment of network of Charging Stations
- c)  Administration  of  Scheme  including  Publicity,  IEC  (Information,  Education  &  Communication) activities.
9. The breakup of fund allocation year wise, component-wise, for the scheme's duration is given below (All amounts are in Rs. Crore)
10. To retain flexibility in the implementation of the scheme there shall be flexibility in changing inter se allocation among various components and sub-components and year wise fund allocation. PISC shall be the competent authority to modify fund allocations among different segments and different types of vehicles. This flexibility in  the  budget  will  be  exercised  depending  upon  the  offtake  in  the  different  components  as  well  as  within different sub components of the scheme.
11. The  efforts of the central  government  to  promote  e-mobility need  supplemental  support  from State Governments.  States need to offer bouquet of fiscal and non-fiscal incentives to be notified separately in order for entities dependent on State support to be eligible for central assistance under this scheme. Some such non fiscal incentives include waiver / concessional road tax, exemption from permit, waiver / concessional toll tax, waiver / concessional parking fees, concessional registration charges etc. States would be encouraged to expand these incentives.
12. Department  of  Heavy  Industry  (DHI)  shall  be  the  nodal  Department  in  Government  of  India  and  shall  be responsible  for  planning,  implementation  and  review  of  the  scheme.  DHI  shall  be  the  nodal  agency  for addressing issued related to the guidelines and for removal of difficulties in the implementation of the scheme. DHI shall issue guidelines as and when necessary in order to meet such objectives of the scheme.

| Sr. No.           | Component                                                      |   2019-20 |   2020-21 |   2021-22 |   Total Fund requirement in crores |
|-------------------|----------------------------------------------------------------|-----------|-----------|-----------|------------------------------------|
| 1                 | Demand Incentives                                              |       822 |      4587 |      3187 |                               8596 |
| 2                 | Charging Infrastructure                                        |       300 |       400 |       300 |                               1000 |
| 3                 | Administrative Expenditure including Publicity, ICE activities |        12 |        13 |        13 |                                 38 |
| Total for FAME-II | Total for FAME-II                                              |      1134 |      5000 |      3500 |                               9634 |
| 4                 | Committed expenditure of Phase -I                              |       366 |         0 |         0 |                                366 |
| Total             | Total                                                          |      1500 |      5000 |      3500 |                              10000 |

## Scheme Parameters: Demand Incentives:

13. Demand incentives are an  important component of the scheme  which directly help in demand generation of electric vehicles by way of reducing the cost of acquisition of such vehicles.
14. Demand  incentive  shall  be  available  for  consumers  (buyers/end  users)  in  the  form  of  an  upfront  reduced purchase price of hybrid and electric vehicles to enable wider adoption, which will be reimbursed to the OEM by Government of India.
15. Following categories of vehicles shall be eligible for demand incentives.
- a. Buses (only Electric Vehicle technology)
- b. Four Wheelers {Electric (EV), Plug in Hybrid (PHEV) and Strong Hybrid (SHEV)}
- c. Three-wheeler (Electric) including Registered E-Rickshaws
- d. Two Wheelers (Electric) Technology Definition of each of these categories to be notified separately.
16. Keeping in view the fact that cost of batteries is one of the main factors of difference in acquisition price of xEVs and ICE vehicles, the demand incentive would be based on battery capacity (i.e. energy content measured in  Kw-Hr) used in the such vehicles. Keeping in view market and technology trends in batteries, PISC may revise the Demand Incentive and target number of vehicles from time to time.
17. With greater emphasis on providing affordable and environmentally friendly public transportation options for the  masses,  scheme  will  be  applicable  mainly  to  vehicles  used  for  public  transport  or  those  registered  for commercial purposes in 3W, 4W and Bus segments. However, privately owned registered 2Ws will also be covered under the scheme as a mass segment.
18. Vehicles, which are registered as -Motor Vehicle‖ as per the Central Motor Vehicle Rules (CMVR) shall only be eligible for the incentives.
19. Vehicles fitted with only advanced batteries satisfying certain performance criteria will only be eligible for the demand incentives  under  this  scheme,  and  for  this  purpose  ‗Advanced  Batteries'  will  be  defined  separately under the scheme.

## Quantum of Demand Incentives:

20. In order to rationalize the incentives across segments and across vehicle technologies, it is initially proposed to extend  uniform  demand  incentive  @  Rs.  10000/-  per  KWh  for  all  vehicles  (including  PHEV  and  Strong Hybrid) except Buses. This will be subject to review and revision by PISC.
21. To encourage public transport, for buses, initial uniform maximum demand incentives @ 20000/- per KWh is proposed subject again to review and revision by PISC.  The amount of incentives  for buses  may  further be subject  to  competitive  bidding  among  the  Original  Equipment  Manufacturers  (OEMs)  conducted  by  public sector transport undertakings for intra-city, inter-city or inter-State buses based on OPEX model.
22. The proposed incentives as  stated  above  would  be  reviewed  annually  or  earlier  by  the  PISC  based  on  price trends for various components and assemblies and market parameters such as offtake of vehicles. It shall allow the scheme to leverage limited budgetary funds for larger number of vehicles, within the overall outlay so as to provide economies of scale to the industry for sustainable manufacturing.
23. Demand  Incentives  for  electric  buses  will  be  provided  only  on  operational  expenditure  model  adopted  by State/city transport corporation (STUs) and other public entities working in the transport sector to augment the fleet of electric vehicles.
24. Vehicle segment wise approximate amount of incentives, initial target number of vehicles and other details are given in Annexure 2.

## Conditions to avail Demand Incentives:

25. In  order  to restrict  high-end  vehicles  from  availing  Government  funded demand  incentives, it is proposed to restrict incentives to vehicles with ex-factory price less than a particular threshold value as stated in Annexure 2.
26. Depending upon the offtake of vehicles under the scheme, maximum incentive per vehicle is proposed to  be capped at certain percentage of cost of vehicle to be reviewed by PISC annually and as often as required. To begin with, the cap on incentives for buses will be 40% of the cost of vehicles and for all other categories it will be 20%.
27. In order to avail scheme incentive for any of the model manufactured by OEM, each such OEM, needs to be registered with DHI/NAB.
28. Each  vehicle  model  needs  to  satisfy  minimum  technical  eligibility  criteria  with  regard  to  performance  and efficiency  of  vehicles  to  be  notified  separately  and  get  it  type  approved  as  per  prescribed  /  standard  test procedure at the recognised testing agencies as notified under the Rule 126 of Central Motor Vehicle Rules by the Ministry of Road Transport and Highways. These testing agencies
29. To  meet  the  qualifying  criteria  for  the  demand  incentives,  the  hybrid/electric  vehicle  (xEVs)  including  its variants and versions, should
6. (a) be manufactured in the country and have such percentage of localisation as may be notified from time to time;
7. (b)  meet  provisions  contained  in  Central  Motor  Vehicle  Rules  (CMVR)  in  terms  of  type  approval, classification, categorization, definition, road worthiness, registration etc. as per the provisions contained in CMVR;
8. (c) obtain certificate of FAME India Phase II eligibility fulfilment from recognised testing agencies;
9. (d)  be  accompanied  by  at  least  three-year  comprehensive  warranty  including  that  of  battery  from  the manufacturer and to have adequate facilities for after sales service for the life of vehicle;
10. (e) be fitted  with suitable  monitoring devices to know the mileage of vehicles to determine the total fuel savings on a real time basis; and
11. (f) should appropriately display a sticker indicating that it has been purchased under the scheme. Format of the sticker will be provided by the Department of Heavy Industry.

## Disbursement of Demand Incentives:

30. The demand incentive for all segments, except buses shall be disbursed through an e-enabled framework and mechanism set-up under DHI. The manufacturers of vehicles (OEMs or Original Equipment Manufacturers) will submit their claims for reimbursement of demand incentive on monthly basis to the Department of Heavy Industry  for  settlement.  Detailed  guidelines  for  reimbursement  of  claim  through  Demand  Incentive  Delivery Mechanism (DIDM) will be issued separately.
31. Detailed  guidelines/  mechanism  for  deployment  of  electric  buses  and  disbursement  of  demand  incentives through State Transport Undertakings shall be notified separately.

## Scheme Parameters: Charging Infrastructure:

32. The Scheme envisages support for setting up of adequate public charging infrastructure to instill confidence amongst EV users, through active participation and involvement of various stakeholders including Government agencies, industries, and Public Sector Enterprises (PSEs).
33. All these charging infrastructures will be established as per Ministry of Power Notification vide No. 12/2/2018EV  dated  14th  Dec  2018  on  the  subject  -Charging  Infrastructure  for  Electrical  Vehicles  -  Guidelines  and Standards‖ and as amended from time to time.
34. In addition, for charging of electric buses, it is proposed to provide to the buyer one slow charger per ebus and one fast charger for every 10 electric buses to be funded under the scheme.
35. Flexibility of funding for establishment of charging infrastructure to the extent of 100% of cost depending upon the project proposal shall be available for promoting electric mobility.
36. Projects for charging infrastructure will also include infrastructure projects required for extending electrification for running of vehicles like pantograph charging, flash charging etc.
37. Inter-linking  of  renewable  energy  sources  with  charging  infrastructure,  smart  grid,  use  of  ICT  etc.  shall  be encouraged.

## Scheme operationalization

38. For smooth operation and implementation of the scheme, knowledge partners / technical expertise and other logistic support shall be put in place.
39.  A suitable IEC program shall be undertaken for creating consumer awareness and promotion of the scheme, on a need basis, through education and training, publicity, organization of business meets/seminars/conferences/symposia etc. by Department of Heavy Industry, Industry Association, Voluntary Organizations, etc.
40. Projects  sanctioned  under  FAME  India  Scheme  Phase  I  shall  continue  to  be  in  operation  as  per  terms  and conditions issued at the time of sanction. Similarly, Electric Buses sanctioned to different state/city transport corporation under FAME India Phase I shall continue to be in operation as per terms and conditions at the time of sanction.
41. Department of  Heavy  Industry  will  be  responsible  for  overall  implementation  of  scheme  and  removing  any obstacle if arises during the implementation of scheme.

[F. No. 1(1)/2019-AEI] PRAVIN L. AGRAWAL, Jt. Secy. Annexure 1

| Composition of Project Implementation and Sanctioning Committee (PISC)   | Composition of Project Implementation and Sanctioning Committee (PISC)   |
|--------------------------------------------------------------------------|--------------------------------------------------------------------------|
| (a) Secretary, Heavy Industry                                            | Chairman                                                                 |
| (b) CEO, NITI Aayog                                                      | Member                                                                   |
| (c) Financial Advisor, Heavy Industry                                    | Member                                                                   |
| (d) Secretary, D/o DPIIT                                                 | Member                                                                   |
| (e) Secretary, M/o RTH                                                   | Member                                                                   |
| (f) Secretary, D/o EA                                                    | Member                                                                   |
| (g) Secretary, M/o Power                                                 | Member                                                                   |
| (h) Secretary, M/o NRE                                                   | Member                                                                   |
| (i) Director ARAI                                                        | Member                                                                   |
| (j) Joint Secretary, Heavy Industry                                      | Member Secretary                                                         |

Committee may co-opt any other member as and when required.

## Vehicle segment-wise incentives, Maximum Number of vehicles to be supported and other details.

| Sr. No.   | Vehicle Segment                               | ## Maximum Number of vehicles to be supported   | Approximate Size of battery in KWH   | ##Total Approximate Incentive@ 10000/KWh for all vehicles and 20000/KWh for Buses and Trucks   | Maximum Ex- factory price to avail incentive   | Total fund support from DHI   |
|-----------|-----------------------------------------------|-------------------------------------------------|--------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------|-------------------------------|
| 1         | Registered e-2 Wheelers                       | 1000000                                         | 2KWH                                 | Rs.20000/-                                                                                     | Rs.1.5 Lakhs/                                  | Rs.2000 Cr                    |
| 2         | Registered e-3 Wheelers (including eRikshaws) | 500000                                          | 5KWH                                 | Rs.50000/-                                                                                     | Rs.5 Lakhs/                                    | Rs.2500 Cr                    |
| 3         | e- 4 Wheelers                                 | 35000                                           | 15 KWH                               | Rs.150000/-                                                                                    | Rs.15 Lakhs/                                   | Rs.525 Cr                     |
| 4         | 4W Strong Hybrid Vehicle                      | 20000                                           | 1.3KWH                               | Rs.13000/-                                                                                     | Rs.15 Lakhs/                                   | Rs.26 Cr                      |
| 5         | e-Bus                                         | 7090                                            | 250KWH                               | Rs.50 Lakhs/-                                                                                  | Rs.2 Crores                                    | Rs.3545 Cr                    |
|           |                                               |                                                 |                                      |                                                                                                |                                                | Rs.8596 Crore                 |

## The proposed amount of incentives per KWH are, however, subject to review as per the reduction in battery costs & thereby reduction in vehicle cost and would be notified accordingly from time to time. It is to be noted that the number of vehicles and fund support among the sub components as above is fungible with the approval of PISC.

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ANNEXURE-II

## Guidelines for Original Equipment Manufacturers (OEMs) to be followed at the time of sale of vehicle

- i. Each OEM is required to get its model certified from recognized testing agencies under rule 126 of CMVR, 1989, for its eligibility under FAME India Scheme Phase-II.
- ii. Once model is certified, it will be approved by DHI/NAB on online platform, with which, incentive amount entitled for particular model will be decided.
- iii. Once model is approved by DHI NAB, OEM is required to upload production data of all vehicles for which they intend to take benefit of demand incentives under the scheme.
- iv. After  uploading  of  production  data  which  will  necessarily  contain  details  like  chassis number,  Unique  battery  number,  color  etc.;  OEM  may  dispatched  the  vehicles  to  their distributors after proper billing / invoice.
- v. Each OEM has to ensure that eligible demand incentive should be deducted at last after all taxes and resulting invoice amount should only be charged from dealer. It is expected that financial cost of amount of demand incentive to be borne by OEM and not by dealer or consumer.
- vi. OEM to submit the reimbursement claim of demand incentives once in a month but not later from 120 days of the sale of vehicle at dealer end.
- vii. After submitting the claim for reimbursement, each OEM to submit an undertaking in the prescribed  proforma , on  the  letterhead  of  the  OEM  and  duly  signed  by  the  authorized signatory and should be furnished to the DHI/ NAB by email.

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