Context:
The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme strategically omits direct subsidies for electric cars. Instead, the government opts to support the electric vehicle sector through fiscal measures, such as reduced Goods and Services Tax (GST) rates on electric cars.
Relevance:
GS II: Government Policies and Interventions
Dimensions of the Article:
- What is the PM E-DRIVE Scheme?
- Key Facts About the Promotion of Electric Cars
- About FAME-II
What is the PM E-DRIVE Scheme?
- Objective: Promotes electric mobility in India with a financial outlay of Rs 10,900 crore over two years.
- Replaces FAME II: This scheme has been launched to replace the FAME II initiative.
- Fiscal Incentives:
- Supports approximately 25 lakh electric two-wheelers, 3 lakh electric three-wheelers, and 14,000 electric buses through demand-based incentives.
- Automakers can claim reimbursements for eligible electric vehicle (EV) sales, continuing the provisions of the FAME-II scheme.
- Exclusion of Electric Cars: Notably, electric cars are excluded from the subsidy.
- Charging Infrastructure: Provisions for the installation of Electric Vehicle Public Charging Stations (EVPCS) in selected cities and highways.
- Technology Modernization: Test agencies will be updated to handle new and emerging green mobility technologies.
Key Facts About the Promotion of Electric Cars:
- Impact of Exclusion from Subsidies:
- Following the exclusion of electric cars from the PM E-DRIVE scheme, electric car sales dropped by 9% between April and August 2024, compared to earlier months when FAME-II was active.
- Inadequate Charging Infrastructure:
- India has approximately 25,000 public charging stations for 46 lakh registered EVs.
- The current ratio of 184 EVs per charging station is higher than in other nations promoting electric mobility.
- Measures Beyond Subsidies:
- Production Linked Incentive (PLI) Schemes: The government provides support for auto components and advanced cell chemistry (ACC) batteries.
- These PLI schemes help lower production costs by fostering economies of scale, especially within the EV supply chain.
- Tax Benefits: Electric cars still benefit from a lower Goods and Services Tax (GST) rate of 5%, compared to 28% on hybrid/CNG vehicles and 49% on internal combustion engine vehicles.
About FAME-II
- FAME India is a part of the National Electric Mobility Mission (NEMM) Plan. Main thrust of FAME is to encourage electric vehicles by providing subsidies.
- NEMM intends to allow hybrid and electric vehicles to become the first choice for the purchasers so that these vehicles can replace the conventional vehicles and thus reduce liquid fuel consumption in the country from the automobile sector.
- The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug in Hybrid & Battery Electric Vehicles.
- Monitoring Authority: Department of Heavy Industries, the Ministry of Heavy Industries and Public Enterprises.
- Under this scheme, demand incentives will be availed by buyers (end users/consumers) upfront at the point of purchase and the same shall be reimbursed by the manufacturers from Department of Heavy Industries, on a monthly basis.
- Fame India Scheme has four focus areas:
- Technology development
- Demand Creation
- Pilot Projects
- Charging Infrastructure
-Source: The Hindu
