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Union Budget 2021: Society of Manufacturers of Electric Vehicles calls for rejig of FAME II – Business News , Firstpost


The Rs 10,000-crore FAME-II scheme, which is to be applied over a interval of three years, got here into impact from 1 April, 2019

Representational picture. Reuters.

New Delhi: Ahead of the upcoming Union Budget, Society of Manufacturers of Electric Vehicles (SMEV) has requested Finance Minister Nirmala Sitharaman to both rejig the FAME II scheme or reintroduce FAME I, saying the programme meant to advertise EVs in its second avatar has been capable of obtain lower than 10 per cent of its goal.

The Rs 10,000-crore FAME-II scheme which is to be applied over a interval of three years got here into impact from 1 April, 2019. It is the expanded model of FAME India I (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) which was launched on April, 2015, with a complete outlay of Rs 895 crore.

In a letter to the finance minister, the trade physique of electrical automobile (EV) makers additionally known as for a notional ”inexperienced cess” on polluting autos and use it to speed up electrical mobility, whereas additionally searching for discount of GST on EVs offered with out battery.

“For a nascent and disruptive industry like EV that is heavily dependent on government policies, there needs to be an effective approach that would drive the market of EVs in the country… The industry is still lagging behind the desired target,” SMEV Director General Sohinder Gill wrote in a letter to Sitharaman.

He additional mentioned, “our analysis shows that efforts must be made to generate demand and we believe that this can be easily done by the government”s intervention relating to streamlining, ironing out policy details and adequate announcements in Budget 2021-22.”

Suggesting measures to assist the sector, Gill known as for a rejig of the FAME II scheme or reintroduction of FAME I.

“It”s been almost 2 years of the FAME II scheme and only less than 10 per cent of its target has been achieved. We should make concerted efforts to remove the kinks that have inadvertently cropped up in Fame II,” he wrote.

The coverage needs to be utterly redrafted, if wanted in order that substantial investments each from inside and outdoors India can circulation into the EV sector to push the exponential progress that everybody has been anticipating for some years. Or else, reintroduce the FAME I scheme that had labored higher for the trade, Gill mentioned.

The FAME II scheme had deliberate to help 10 lakh electrical two-wheelers, 5 lakh three-wheelers, 55,000 4-wheelers and seven,000 buses.

SMEV had up to now argued that FAME II couldn’t appeal to clients to shift from polluting petrol bikes to electrical two-wheelers, primarily as a result of the preconditions and qualification standards of FAME-II made the bikes unaffordable to the mass market buyer regardless of the subsidy.

In his letter, Gill additionally requested the finance minister to contemplate “the imposition of a notional green cess on the polluting vehicles and use it to accelerate electric mobility. It would generate massive funds and reduce the burden on the government exchequer.”

This fund may very well be utilised within the frontloading of incentives to clients and produce electrical two-wheelers costs all the way down to the extent of petrol two-wheelers, he added.

Seeking discount of GST on EV offered with out battery, Gill mentioned, “Currently, GST on a lithium battery is taxed at 28 per cent when offered individually, whereas the automobile offered with battery is taxed at 5 per cent.

“Recently, MoRTH approved the registration of EVs without the battery, therefore, vehicles without batteries should also fall in the EV GST category. Hence, we urge the government to reduce it to 5 per cent, similar to GST applicable on EVs.”

SMEV additionally sought extension of the phased manufacturing programme (PMP) saying COVID-19 has derailed the expansion path of the trade, which has weakened the creation of the native part market.

“Hence, we urge the government to extend the PMP guideline for just another year so that the industry can come on track, which will automatically strengthen the local component market,” Gill wrote within the letter.

Last September, the federal government had prolonged the deadline for native manufacturing to be eligible for incentives underneath the FAME II scheme for elements just like the digital throttle for all classes of EVs until April 1, 2021, from earlier deadlines starting from April 1, 2020, to October 1, 2020.

Asking for the inclusion of EVs in Swachh Bharat Mission, Gill wrote, “A dedicated budget could be allocated for the ”Clean Air” campaign, which could be integrated under the Swachh Bharat mission. The ”Clean Air” campaign can create massive awareness on Electric mobility and can influence the mindset of customers to adopt electric mobility to make India less polluting and its citizens healthier.”

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