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Electric Two-Wheeler: Government may end subsidy on electric two-wheelers, claims report

Subsidy on electric two-wheelers is likely to end in a few weeks. Because the government is in no mood to implement the third phase of Faster Adoption and Manufacturing of Electric Vehicles i.e. FAME III. This has been revealed in a media report. According to the report, the Finance Ministry and other government departments do not see any significant benefit in increasing EV subsidies.

Earlier this year, the government had already reduced subsidies, which led to a decline in demand for electric two-wheelers. However, demand now appears to be stabilising, which has led government officials to argue that the transition to clean-fuel vehicles will happen naturally due to the economic benefits of running them, despite their initial higher costs.

FAME II, which provides subsidies for two-, three- and four-wheelers used for public transport, is scheduled to end in the coming weeks. The government hopes that by then it will have provided subsidy for about 10 lakh two-wheelers. This will be done by redistributing the funds so that the demand of local companies can be met. The initial allocation of this scheme was Rs 10,000 crore.

The Ministry of Heavy Industries had proposed a more ambitious plan for FAME III. But it has not received enough support yet. The decision against Phase 3 comes at a time when the government is looking to launch a new scheme to incentivize high-end electric car makers like Tesla to set up production facilities in India for both the domestic and export markets. Is.

This new scheme could be like a production-linked incentive mechanism or a phased manufacturing plan. The details of this new scheme are being discussed within the government. Additionally, the government’s decision may be influenced by irregularities found in the implementation of FAME by some companies.


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