2024 Budget: Sitharaman almost halves FAME allocation, no GST relief for EV industry
Finance Minister Nirmala Sitharaman, in her Budget 2024 annoucement, has almost halved the allocation for the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme. As per the Union Budget 2024-25 document, Rs 2,671.33 crore has been allocated for the scheme, compared to Rs 4,807.40 crore in the preceding year. Incidentally, this year's allocation is almost the same as that of 2022-23; in FY23, the government had allocated Rs 2,402.51 crore towards the FAME scheme.
As expected, Sitharaman has not announced the FAME III scheme. Notably, Union Minister HD Kumaraswamy had previously mentioned that the FAME III scheme is being finalized based on recommendations from relevant ministries, though the exact implementation date has not been specified.
Commenting on the Budget Akihiro Ueda, CEO of Terra Charge India, said, "The 2024 Budget has continued to support the EV industry which is a great incentive for manufacturers but I still look forward to the measures that will enhance the growth, address the supply chain problems, and promote sustainable mobility.
The highlight of this budget is the complete exemption from customs duties on lithium which is a key component in EVs. Additionally, the government is promoting more job creation in the manufacturing sector which will directly impact around 30 lakh youth and I am very sure that all the skilled workers will help in raising the EV market growth in India. However, I feel that the government should focus on the GST rates that are implied on the raw materials, reducing the GST on this will release the stress from the manufacturers which will automatically benefit the customers."
