'Govt to issue notices to debar more cos found violating FAME-II norms'

The government will issue notices to more companies that have been found violating localisation norms under the Rs 10,000-crore FAME-II scheme seeking to debar them

Press Trust of India New Delhi


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The government will issue notices to more companies that have been found violating localisation norms under the Rs 10,000-crore FAME-II scheme seeking to debar them and recover incentives claimed by them since FY 2019-20, an official said on Wednesday.

Also, the Heavy Industries Ministry will resume disbursal of subsidies under the scheme shortly as reports of most of the firms under the ambit of the audits being conducted by India's premier vehicle testing and validation agencies ICAT and ARAI have been received, the official said.

"We have received reports that some other companies have also violated the FAME-II guidelines. We will be issuing them notices similar to the notices issued to two firms found to be violating the localisation norms earlier," said the official, requesting anonymity.

He shared that the subsidies have not gone out but reports of most of the companies have come.

"IFCI is processing the subsidy claims and shortly may be in a couple of days we will be resuming disbursal of the subsidies under FAME-II to those whose names have been cleared after the probe," the official said.

The government recently sent notices to Okinawa Autotech and Hero Electric for debarment from the FAME-II Scheme and sought the recovery of incentives claimed since FY 2019-20 after the two companies were found to be violating localisation norms under the scheme, sources said.

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Both companies had denied the allegations.

While Okinawa said it did not receive any notice from the government to refund subsidies and "has always adhered to government policies", Hero Electric said it received a letter referring to the bikes manufactured 3 to 4 years back but finds that its bikes fully comply with the FAME localization guidelines and "hence the question of refund etc does not apply".

The FAME II scheme commenced on April 1, 2019, for a period of three years, which was further extended for a period of two years up to March 31, 2024.

The total outlay for FAME Scheme Phase II is Rs 10,000 crore. The scheme is exclusively for public and commercial transport in the segments of electric three-wheelers (e-3W), electric four-wheelers (e-4W), and electric buses.

The benefit of the incentive is available to privately owned registered electric two-wheelers (e-2W).

Vehicles fitted with only advanced batteries like lithium-ion batteries and other new-technology batteries will be eligible for incentives under the scheme.

Another major set of PMP guidelines requires companies to use certain components and sub-assemblies of electric vehicles manufactured in India to avail of incentives within set timelines.

The Ministry of Heavy Industries received complaints regarding the misappropriation of subsidies under the FAME India Scheme Phase II by some EV manufacturers.

To address these complaints, the ministry delegated the testing agencies to investigate the matter against the companies found in order to protect consumers.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: May 17 2023 | 11:30 PM IST

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