Centre To Recover Rs 469 Cr From 7 Electric 2W Makers For Non Compliance With FAME II
Centre To Recover Rs 469 Cr From 7 Electric 2W Makers For Non Compliance With FAME II
Following the receipt of anonymous emails alleging misconduct, the ministry initiated an investigation into the matter. The emails claimed that several electric vehicle (EV) manufacturers were improperly claiming subsidies without adhering to the Phased Manufacturing Plan (PMP) rules. The primary objective of the PMP rules is to promote and boost domestic manufacturing of electric vehicles.
The allegations raised concerns about the authenticity of subsidy claims made by these EV makers, suggesting that they might not be in compliance with the required manufacturing guidelines. As a result, the ministry took these allegations seriously and launched a comprehensive inquiry to ascertain the accuracy of the claims and assess whether the EV manufacturers were indeed fulfilling the PMP requirements.
By conducting this investigation, the ministry aims to ensure that the subsidy scheme is being utilized appropriately and that EV manufacturers are adhering to the guidelines laid out in the Phased Manufacturing Plan. By encouraging domestic manufacturing, the government seeks to foster the growth of the electric vehicle industry within the country and reduce dependence on imports.
The outcome of the investigation will play a vital role in determining whether any corrective measures need to be taken to ensure fair and transparent practices in the sector.
The ministry’s actions reflect their commitment to promoting sustainable development in the EV industry and maintaining integrity in the subsidy program, which plays a crucial role in encouraging the adoption of electric vehicles for a greener and more environmentally friendly transportation ecosystem.
The Indian government has taken action against seven electric two-wheeler manufacturers, including well-known companies like Hero Electric and Okinawa. The government has asked these companies to repay a total amount of Rs 469 crore (Indian Rupees) for claiming incentives under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme while failing to comply with the scheme’s norms.
The investigation, conducted by the heavy industries ministry, uncovered that these companies had availed fiscal incentives offered by the FAME II scheme by disregarding the prescribed guidelines. As a result, the government has demanded the repayment of the incentives received by these companies.
The official further stated that if these companies fail to refund the specified amount within a stipulated period, which is 7-10 days, they will be de-registered from the FAME II scheme. This means that they will lose their eligibility to participate in the scheme and claim any future incentives under it.
The FAME II scheme is a critical initiative by the Indian government to promote the adoption of electric vehicles in the country and reduce vehicular emissions. However, ensuring compliance with the scheme’s guidelines is essential to maintain the integrity of the program and ensure that incentives are rightfully given to manufacturers who contribute to the growth and development of electric mobility.
By taking action against non-compliant manufacturers, the government aims to enforce accountability and fair practices in the electric vehicle industry. It also sends a strong message to other players in the market to adhere to the rules and regulations set forth by the FAME II scheme, fostering a more sustainable and transparent ecosystem for the electric vehicle sector in India.
According to the rules of the FAME II scheme, incentives were provided to electric vehicle manufacturers who used domestically produced components in their vehicles. However, during the investigation conducted by the heavy industries ministry, it was discovered that seven electric two-wheeler manufacturers violated the norms by using imported components instead of made-in-India components.
Out of the thirteen companies investigated, six were found to be in compliance with the guidelines of the scheme. However, the remaining seven companies, namely Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto, were found to have availed fiscal incentives under the FAME II scheme despite not adhering to the requirement of using locally sourced components.
As a result of their non-compliance, the government has demanded that these seven companies repay the incentives they received, totaling Rs 469 crore. The government’s stance is clear – those companies that have violated the scheme’s guidelines will have to return the incentive amount they received from the government.
By taking action against the companies that violated the norms, the government aims to ensure that incentives are provided only to manufacturers who genuinely promote domestic manufacturing and contribute to the growth of the electric vehicle ecosystem in India. Enforcing compliance with the rules of the FAME II scheme is crucial to maintaining transparency and fairness in the incentive program and fostering a thriving and self-reliant electric vehicle industry in the country.
The investigation by the ministry was initiated in response to anonymous emails alleging that several electric vehicle (EV) makers were claiming subsidies without adhering to the Phased Manufacturing Plan (PMP) rules, which are designed to promote domestic manufacturing of electric vehicles.
As a consequence of the investigation and the findings of non-compliance with the PMP rules, the ministry took action to delay the distribution of subsidies during the previous financial year.
Among the seven companies implicated in the investigation, two of them have communicated with the ministry and expressed their intention to return the incentive amount they had received, along with interest.
While the government has not imposed any restrictions on these companies from continuing to manufacture electric vehicles, they will no longer be eligible to receive any incentives under the scheme due to their non-compliance.
When approached for comment, a spokesperson from Hero Electric stated that the notice they received is not relevant to their company as they believe there was no cause for non-compliance during the period under question.
The investigation and the subsequent actions taken by the government underscore the importance of adhering to the rules and guidelines set forth in the schemes aimed at promoting domestic manufacturing and sustainable growth of the electric vehicle industry in India. By ensuring compliance, the government seeks to create a level playing field and encourage fair practices among electric vehicle manufacturers in the country.
The spokesperson from Greaves Electric Mobility (GEM) stated that their company has been a strong supporter of the government’s localization vision from the beginning. They are actively collaborating with the government to gain a better understanding of their concerns, and in response, have submitted a detailed representation to address the matter.
On the other hand, Lohia Auto’s CEO, Ayush Lohia, has emphasized that they have not received any official communication or notice from the government regarding the reversal of subsidies. He expressed surprise at the source of the information that alleges Lohia Auto Industries’ involvement in the matter.
Okinawa Autotech and Revolt Motors declined to provide any comments regarding the issue.
The FAME-II scheme, introduced in 2019, is a significant government initiative aimed at promoting electric and hybrid vehicles. With an allocated budget of Rs 10,000 crore, the scheme is an expansion of its predecessor, FAME India I, which was launched in 2015 with a budget of Rs 895 crore.
Under FAME-II, incentives are primarily applicable to three-wheeler and four-wheeler vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus is on private vehicles, encouraging individuals to adopt electric two-wheelers for their personal transportation needs.
The situation highlights the importance of adhering to the guidelines and regulations set forth by the government for availing incentives and promoting domestic manufacturing in the electric vehicle sector. The government’s efforts to ensure compliance are crucial to fostering a sustainable and competitive electric vehicle industry in India.
