Govt planning to expand subsidy to alternate fuel vehicles?

The government has started working on financial assistance for the third phase (FAME-3) for faster adoption and manufacturing of hybrid and electric vehicles. According to the sources, it is anticipated that government may also include vehicles running on alternative fuels.

According to an official announcement, it is also suggested that the next phase of FAME include vehicles powered by hydrogen and biofuels. According to government officials, the goal of the programme is to promote the use of alternative fuel cars and discourage the use of petrol and diesel vehicles, which contribute to pollution. Overall, it aims to encourage the use of clean technology vehicles by getting rid of cars and trucks using petrol and diesel engines.

Nine alternative powertrains to petrol-diesel engines have been recognised by the association of automakers (SIAM). These alternatives include automobiles that run on ethanol, flex fuel, and other ecologically friendly synthetic fuels and biofuels, as well as engines that use gases like natural gas, liquefied petroleum gas (LPG), and hydrogen.

The category of zero emission vehicles includes both fuel cell and battery-operated electric vehicles. Such engines demonstrate the industry’s dedication to green and sustainable transportation options. Under the FAME programme, the government currently provides subsidies for battery electric vehicles and more hybrid automobiles.

The FAME scheme’s first two phases significantly contributed to the rise of electric vehicle adoption in the nation. As a result, the percentage of electric vehicles on the nation’s automobile market has risen to 6%. Approximately Rs 900 crore was allotted by the government for the FAME program’s first phase in 2015 and its second phase in 2019.

Gradually, the total amount of subsidy increased to about Rs 10,000 crore. So far, more than 10 lakh vehicles have been given subsidy under this scheme. Meanwhile, the government is also working rapidly on starting the next phase of the FAME scheme but it is not decided whether the name of the scheme will remain the same or will change.

According to the information, the Finance Ministry and the Prime Minister’s Office will soon review the draft proposal of FAME-3 scheme. Notably, the deadline for Fame-2 is going to end in March 2024.