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

An official said on Wednesday that the government will issue notifications to more companies found to be violating localization criteria under the 10,000-crore FAME-II scheme in a bid to ban them and restore the incentives they have been claiming since the 2019-20 financial year.

The official also said, the Ministry of Heavy Industries will resume disbursement of subsidies under the scheme soon as reports have been received of most of the companies within the scope of audits conducted by India’s leading vehicle testing and validation agencies ICAT and ARAI.

“We have received reports that some other companies have also violated the FAME-II Guidelines. We will issue them notices similar to those issued to two companies that were found to have violated the FAME-II standards earlier,” said the official, who requested anonymity.

He said support has not been interrupted, but reports have been received on most companies.

“IFCI is processing support claims and soon we may resume within two days the disbursement of support under FAME-II to those who have been acquitted after the investigation,” the official said.

The sources said the government recently sent notices to Okinawa Autotech and Hero Electric to be denied from the FAME-II scheme and has sought to recover the alleged incentives since the 2019-20 fiscal year after the two companies were found to be in violation of localization standards under the scheme.

Both companies denied the allegations.

While Okinawa said it received no notice from the government to refund the subsidies and has “always adhered to government policies,” Hero Electric said it received a letter referring to bikes made 3 to 4 years ago but found its bikes fully complied with FAME localization guidelines “and therefore Refunds etc. do not apply.”

The FAME II scheme began on April 1, 2019 for three years, and has been extended by two years to March 31, 2024.

The total expenditure on FAME Scheme Phase II is Rs. 10,000 crore. This scheme is exclusively for public and commercial transport in the electric three-wheeler (e-3W), electric four-wheeler (e-4W) and electric bus sectors.

The incentive benefit is available for registered, privately owned electric two-wheelers (e-2W).

Only vehicles equipped with advanced batteries such as lithium-ion batteries and other new technology batteries will be eligible for incentives under the scheme.

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

The Ministry of Heavy Industries has received complaints regarding the misappropriation of subsidies under the second phase of the FAME India scheme by some electric vehicle manufacturers.

To address these complaints, the ministry has authorized testing agencies to investigate the matter against existing companies in order to protect consumers.