NEW DELHI (TIP): In a bid to promote usage of hybrid vehicles to curb pollution, the government is likely to dole out Rs 500- 700 crore package for electric vehicles in the upcoming budget.

According to sources, the package would be under Faster Adoption and Manufacturing of (Hybrid and) Electric vehicles in India (FAME India) scheme, where the funds will be utilised in two parts – one for subsidising the technology development and research, create charging infrastructure, and the other will be given out directly as subsidy to the consumer for buying the vehicle.

Confirming the development to HT, a senior official at the department of heavy industries said that the move is part of the need to encourage the demand and supply of electric and hybrid vehicles in the country.

Once allocated, the amount will be a substantial increase from Rs 75 crore given in the last budget.

“Last year, the Budgeted Estimate was Rs 75 crore, in this budget it is expected that over Rs 500 crore. And as per the plan, more than 50% of the allocation will be spent on subsidising the vehicles and the remaining will be given to manufacturers for R&D, some part of it will be kept aside for pilot projects, and for creating charging infrastructures,” sources said.

The ministry has already spent the allocated Rs 75 crore, and for the remaining three months of this fiscal has sought an increase of Rs 50 crore from the expenditure department to be spent on subsidies and other infrastructure, the source added.

“The scheme has already resulted in better vehicle sales figures this year. Over 35,000 vehicles have been subsidised, and the department expects to subsidise 100,000 vehicles in the next fiscal,” the source said.

The government in the last year budget had agreed to Rs 795 crore support in the first two fiscals for the FAME India scheme, which is a part of the National Electric Mobility Mission Plan.

Maini group’s Reva was India’s first electric vehicle. In 2010, Mahindra and Mahindra bought a majority stake in Bangalore-based Reva.

However, since then, M&M has not been able to generate enough volumes in the domestic market for its flagship e2o, the first automatic electric car created by Mahindra Reva.

HT