CBITA Writes Letter To MHI Against Taking Back Subsidies From OEMs

The action taken by the Ministry of Heavy Industries (MHI) against OEMs to claw back earlier subsidies is tantamount to the complete collapse of the faster adoption and manufacturing of hybrid and electric vehicles (FAME II) subsidy, Centre for Business, Industry & Trade Advocacy (CBITA) said in a letter on Friday.

CBITA is an issue-based advocacy group that assists global businesses and industry navigate policy, processes and environment in India. It also assists corporates, stakeholders and governments to find workable solutions to problems of policy and processes.

According to the letter, It has missed targets by 50 per cent and FAME II is now gearing for a failure of almost 85 per cent in target achievement. It also claimed that the latest action of penalties on OEMs will conclude that the ministry disbursed no funds under the FAME II scheme since 2019.

In the letter, CBITA said that the department has slapped 4 OEMs with 100 crore as a penalty other than asking them to return the monies collected from customers as a punishment for breaching the 1.5 lakh rupee threshold. Meanwhile, it has issued similar demands to other OEMs who have no such matter of dispute but an earlier pending case of non-compliance with PMP norms.

In effect, the recent correction issued by the SMEV – that the MHI achieved only 50 per cent of its mandated target would shrink to probably just 15 per cent achievement if this subsidy is also withdrawn, CBITA predicts.