FAME India Scheme- Understanding The Initiative

The FAME India project supports the hybrid and electric vehicle market, its development and manufacturing ecosystem. In the first place, they had launched the National Electric Mobility Mission Plan (NEMMP) 2020 to attain 6-7 million sales year on year from 2020 onward. The government aims to achieve national fuel security by promoting the same and provides fiscal and monetary incentives to kick start this nascent technology. This would not only benefit the electrical and manufacturing industry but also the auto component and green energy sector. These sectors are also the key focus sectors of ENGIMACH 2021 organized by K and D Communication Ltd.

The first phase of FAME India

The FAME scheme had an outlay of ₹8.95 billion and provided subsidies for electric vehicles. This included two-wheelers and three-wheelers, hybrids and e-cars and buses. Phase-I initially launched for 2 years, focused on implementation through demand creation, technology platform, pilot project and charging infrastructure.

To further promote sustainable growth, the year 2015 witnessed the launch of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme. Grants for specific projects were also sanctioned under these components. EVs under all vehicle segments could benefit from the demand incentive of ₹343 Cr approx. in the form of an upfront reduced purchase price. The National Automotive Board under D/o Heavy Industry implemented and monitored the amount of incentives availed. The government of India launched the scheme under National Mission on Electric Mobility in 2011/ National Electric Mobility Mission Plan 2020. As a result of this, there could be a raise progressive induction of reliable, affordable and effective electric vehicles.

Subsequently, the extension shifted from time to time. Lastly, the extension was allowed up to 31st March 2019 under the framework of the Demand Incentive Disbursement Mechanism.  At present, the scheme has 30 Original Equipment Manufacturers registered under it with 137 models of all categories. The electrification expects about 50 million liters of fuel-saving and about 129 million kg CO2 reduction. The digitalized portal of the schemes shows the benefits of e-vehicles sold. Additionally, the portal reflects MIS reports to help in monitoring and management.

FAME II

Commencing from April 2019, the Department of Heavy Industry approved Phase II of the scheme – FAME II with an outlay of ₹10,000 Cr for 3 years. It allotted about 85 per cent of the total budgetary support for demand incentives. The aim furthermore is to support an estimate of 7000 e-buses, 10 Lacs electric two-wheelers, 5 Lacs electric three-wheelers and 55000 electric four-wheeler passenger cars including strong hybrid.

The scheme encourages manufacturers to build electric vehicles while also creating and developing charging infrastructure. The government estimate spending of around 10,000 Cr on this phase in the upcoming year of 2021 and 2022. It states that there will be high use of electric buses to reduce pollution, traffic and other types of difficulties. The scheme mainly focuses on private vehicles in the two-wheeler segment in metropolitan cities. It encourages the use of electrical charging stations over diesel and petrol ones. The Government of India has planned on giving out 670 e-buses in the state of Chandigarh, Goa, Gujarat and Maharashtra and creating 241 charging stations. These stations, supposedly, are to be planted by the roads of Gujarat, Kerala, Madhya Pradesh, Port Blair and Tamil Nadu.

Major highlights under FAME India

• Promotion of electrical vehicles among the residents of India
• Establishing an Eco-friendly public transport system
• Controlling the pollution level rising in various cities
• Encouraging people to purchase/switch electrical vehicles
• Constructing more charging stations
• Providing society on purchase of electrical vehicles
• Interlinking of renewable sources of energy powered through charging systems

Subsidy under the FAME India scheme

To be eligible for incentives under phase-II of the scheme, vehicles ought to meet minimum technical criteria and registered as “Motor Vehicles” as per CMVR. Although, only vehicles fitted with advanced chemical batteries fall under the criteria. The scheme will apply to vehicles used for public transportation, registered for commercial purposes in e-3W, e-4W and e-bus, or private-owned vehicles registered as e-2Ws to generate greater emphasis for the masses.

The government, however, has not yet prescribed any application procedure for the subsidiary under FAME-II. Check for update on the official website of heavy industry, ministry of heavy industries and public enterprises, Government of India.

INDUSTRY 4.0 AND THE MANUFACTURING SECTOR

The current Gross Value Added (GVA) from the manufacturing sector was estimated at US$350.27 billion by the end of the financial year 2021. On balance, it accounts for 19% of the country’s Gross Value Added. A recent survey estimates the capacity utilization in the manufacturing industry to stand at 63% in the second quarter of FY21.

IHS Markit complied Manufacturing Purchasing Managers Index (PMI) increased by 1.3 from December 2020 to January 2021. According to the Ministry of Statistics & Programme Implementation, the country’s industrial output reached 135.2 in December 2021, while the industrial output indices for the manufacturing sector alone stood at 135. in January 2021.

INDUSTRY 4.0 BENEFITS FOR THE SECTOR

Industry 4.0 aims at automation and data exchange in the current manufacturing technologies, including cyber-physical systems, the Internet of things (IoT), cloud computing and cognitive computing and creating the smart factory.

• MSME manufacturers can receive immediate and long term benefits by digitizing the shop floor. These include instant analysis of production status, error elimination and so on.
• The initiative promises long term benefits of increased operational efficiency, quality and a flexible reporting process.
• Not only the real-time production analysis provides an update to our perspective, but it also gives a better insight into the machinery, personnel and efficiency.
• Furthermore, the associated digital documentation eliminates the errors and sets a proper approval hierarchy in place simplifying the entire process.
• Digitization helps saving time while reducing expenses. The manufacturers can focus on competing in the market.
• The use of AI for predictive maintenance of the process machinery is an established commercial tool. The smart prediction algorithms increase equipment availability for operations and thence, reduces costs.
• Systems integrated with predictive maintenance software generates alarms. In any event, the errors can be rectified and resolves without stopping the entire process.
• Tool-sets like production scheduling, workflows and inventory management improves operations and process flows.
• We the transition, we can now save time on recording, documenting, correcting data and checking on machinery. Engineers are now able to track more variables, improving the preventative maintenance results.

DIGITAL TRANSFORMATION IN THE MANUFACTURING SECTOR

The government of India set up a 22 member Inter-ministerial Committee in November 2020. It presented the idea of strengthening the Capital Goods sector, enabling its contribution towards the goal of achieving the US $5 trillion economy. The data includes the US $1 from the manufacturing sector. Up to the present time, they have already set a target of increasing the contribution of manufacturing output to 25% of our GDP by 2025.

This committee’s agenda includes technology development, global value chains and skill development as per the global standards. They are working on improving custom duties procedures to make the sector stronger on international platforms. Given these points, India could become the manufacturing hub of the world. In January 2021, the 6th inter-ministerial Review Committee for Capital Goods scheme gathered to plan the creation of an eco-system for R&D for manufacturing technology. The development of based open manufacturing technology innovation platforms is the step towards it.

Conclusion

It is known that an increasing number of industries and professionals are beginning skill enchantment programmes. It is not only for immediate implementation but also to make the employees ready for the future. Industry 4.0 Digitization is becoming popular with time. However, a hitch in the mindset of the industry personnel still exists for participating in the automation projects and training.

The approach seems to be the way ahead even in the MSMEs. Senior level managers would be required to take this initiative forward so India could paint the globe with its vibrant manufacturing economy. K & D Communication Ltd puts forwards ENGIMACH 2021 as our share of contribution in the learning process. ENGIMACH is a platform for the Indian engineering and manufacturing industry to come out and address the innovation, trend and scope of the industry.