Lok Sabha Question No. 2620 (UNSTARRED), answered on 2021-12-14
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. 2620

ANSWERED ON 14.12.2021

## FINANCIAL ASSISTANCE UNDER FAME INDIA SCHEME

## 2620.  SHRI MALOOK NAGAR:

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

- (a) the  details  of  various  categories/groups  that  have  been  provided  financial  assistance under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) India Scheme;
- (b) the details and the total number of people in Bijnaur and in Uttar Pradesh, who have received promotional assistance of Rs. 3,300 to Rs. 61,000 for three-wheeler vehicles;
- (c) the details of procedure under which hybrid battery vehicle manufacturers can claim the said promotional assistance at the end of every month; and
- (d) the time by which the said assistance is received?

## 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 e-2W, 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 108 number of electric vehicles amounting to a total demand incentive of about Rs. 35 lakhs have been incentivized in the district of Bijnore (UP) as on 07 th December, 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 detail 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

(a) be manufactured in the country and have such percentage of localisation as may be notified from time to time;

(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;

- (c) obtain certificate of FAME India Phase II eligibility fulfilment from recognised testing agencies;

(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;

(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

- (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. 12/2/2018-EV  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)           |
|-------------------------------------------------------------------|------------------|
| (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 MHI/ NAB on online platform, with which, incentive amount entitled for particular model will be decided.
- iii. Once model is approved by MHI 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 MHI/ NAB by email.

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