The union cabinet chaired by Prime Minister Narendra Modi granted approval to the second phase of FAME India (Faster Adoption and Manufacturing of Electric Vehicles in India) for the promotion of electric and hybrid vehicles.
The policy, which was announced by Finance Minister Arun Jaitley on Thursday, will have an impact on auto companies.
The government has increased a total outlay for the policy to Rs10,000cr from Rs895cr allocated under the first phase, which was launched in April 2015. The government will spend Rs10,000cr over a period of three years from 2019-20 to 2021-22.
“The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicles by way of offering an upfront incentive on a purchase of electric vehicles,” said the government in a statement.
As per policy, demand incentives on operational expenditure model for electric buses will be delivered through State/city transport corporation (STUs). In 3-wheeler and 4-wheeler segment, incentives will be applicable mainly to vehicles used for public transport or registered for commercial purposes. In e-2wheelers segment, the focus will be on private vehicles.
Through the scheme, the government is planning to support 10 lakhs e-2 wheelers, 5 lakhs e-3 wheelers, 55,000 4-wheelers, and 7,000 Buses.