FAME Scheme-II

  • On 3rd January, 2020, in a bid to push electric vehicle (EV) adoption in the country, the government approved the setting of 2636 charging stations in 62 cities across 24 States/UTs under FAME India (Faster Adoption and Manufacturing of Electric Vehicles in India) scheme phase II.
  • Out of these 2636 charging stations, 1633 Charging Stations will be Fast Charging Stations and 1003 will be slow charging stations. With this, about 14000 Charging Stations will be installed across the selected cities.

About FAME Scheme-II

  • Launched in March, 2019,under National Electric Mobility Mission (NEMM), FAME-II aims to boost electric mobility and increase the number of EVs in commercial fleets, with an outlay of Rs. 10,000 Crore for a period of 3 years commencing from 1st April 2019.
  • The scheme is being implemented through the following verticals:
  • Demand Incentives
  • Establishment of networks of Charging Stations
  • Administration of Scheme including publicity, IEC (Information, Education and Communication) activities.
  • This phase mainly focuses on supporting electrification of public and shared transportation, and aims to support (through incentives) about 7000 e-buses, 500,000 electric three-wheelers (e-3W), 55,000 electric four-wheeler (e-4W) passenger cars and one million electric two-wheelers (e-2W).
  • Out of total budgetary support, about 86 percent of fund has been allocated for Demand Incentive so as to create demand for EVs in the country.

Objective

  • To encourage faster adoption of electric and hybrid vehicles by way of offering upfront incentive on purchase of Electric Vehicles (EV) and by way of establishing necessary charging infrastructure for EV.

Salient Features

  • Electrification of Public Transport: The emphasis will be on electrification of public transport that includes shared transport like 3- wheelers and buses and the demand incentives on operational expenditure mode for electric buses will be delivered through state/city transport corporations (STUs).
  • Incentives to Public & Private Vehicles: In three-wheeler and four wheeler segments, incentives will be applicable mainly on vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus will be on private vehicles.
  • Advancement of Lithium-ion Batteries: In order to encourage advance technologies, the benefits of the incentives will be extended to only those vehicles, which are fitted with advanced battery like lithium-ion battery and other new technology batteries.

National Electric Mobility Mission Plan (NEMMP)

  • Launched in 2013, NEMMP- 2020 is a National Mission document providing the vision and the roadmap for the faster adoption of EVs and their manufacturing in the country.
  • This plan has been designed to enhance national fuel security, to provide affordable and environmentally friendly transportation and to enable the Indian automotive industry to achieve global manufacturing leadership.
  • Under the NEMMP, there is an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles by the year 2020.

Impact

  • Pollution Control: Adoption of EVs in the country will help in addressing the issue of air pollution, due to the indiscriminate use of fossil fuels.
  • Sustainable Use of Fossil Fuels: The scheme will provide fuel security as it helps to lessen the dependency on fossil fuels there by paving the path of sustainable and efficient use of fossil fuels.
  • Holistic Approach: It presents a more holistic approach as it not only touches upon critical technical issues such as battery cost & efficiency, charging infrastructure, etc. but also stresses upon the indigenization of the entire EV value chain.

Challenges Driving India’s Electric Mobility Initiatives

Rising Crude Oil Imports - An Energy Security Challenge

  • India's oil import dependence has risen from 82.9 percent in 2017-18 to 83.7 percent in 2018-19.
  • The country's oil consumption grew from 184.7 million tonnes in 2015-16 to 194.6 million tonnes in the following year and 206.2 million tonnes in the year there after. In 2018-19, demand grew by 2.6 per cent to 211.6 million tonnes.

Rising Pollution Levels – An Environmental Challenge

  • India ranks as the third largest carbon emitting country in the world accounting for 6% of the global carbon dioxide emissions from fuel combustion.
  • According to the WHO Global Air Pollution Database, 14 out of the 20 most polluted cities of the world are in India.

Rising Population – A Sustainable Mobility Challenge

  • India’s current population of 1.2 billion is expected to reach 1.5 billion by 2030. Out of the 1.5 billion people, 40% of the population is expected to live in urban areas compared to 34% of 2018 population projection.
  • The additional 6% population growth is likely to further add strain on the struggling urban infrastructure in the country, including a rise in demand for sustainable mobility solutions.

Recent Government’s Efforts to Promote Electric Mobility

  • Tax initiatives to promote fully electric vehicles:
    • GST reduction on Fuel cell vehicles: 28% to 18%
    • GST reduction on Li-ion battery: 28% to 12%
    • Hybrid vehicles have been kept in the same category as luxurycars and will be taxed at the peak rate of 28% plus a cess of 15%.
  • Ministry of Power has allowed sale of electricity as ‘service’ for charging of electric vehicles. This would provide a huge incentive to attract investments into charging infrastructure.
  • Ministry of Road Transport Highways issued notification regarding exemption of permit in case of battery operated vehicles.
  • In March, 2019, the government launched the National Mission on Transformative Mobility and Battery Storage to promote clean, connected, shared, sustainable and holistic mobility initiatives.

Source : Civil Services Chronicle Online, January, 2020