The government is considering measures to penalise electric scooter makers for wrongfully claiming subsidies under the FAME II scheme.

What Happened? The government is considering possible actions, including debarring companies from future subsidies and denying incentives on vehicles sold over the last 15 months, a government official told the Economic Times.

Last month, recovery notices were sent to Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto, and AMO Mobility for violating local sourcing norms under FAME II. The companies face a potential penalty of nearly ₹500 crore.

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The Centre had suspended ₹1,400 crore subsidy disbursal under the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme to 13 firms pending enquiries by Automotive Research Association of India and International Centre for Automotive Technology. Subsidies will be released to companies that have been cleared, and all valid claims will be approved by the end of the month.

So far, around ₹200 crore of the stalled subsidies have been paid out, and most claims are expected to be cleared by the end of the month, the official told the business daily. The government has received 10.5 lakh claims for incentives, with 4 lakh claims on electric two-wheelers still pending approval.

Claims include those from the erring companies, sales in unregistered states, and cases with queries raised by the authority regarding information provided.

The Indian government recently changed in FAME India subsidy scheme to cut the per-unit subsidy for electric two-wheelers while widening the number of vehicles incentivised.

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