NEW DELHI : After hogging limelight in 2015 with clampdown on German auto giant Volkswagen, ‘FAME’ is high on the New Year agenda of the Heavy Industries Ministry with a big push for greater adoption of hybrid and electric vehicles.
The Ministry has launched ‘FAME India – Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India’ as part of the National Electric Mobility Mission Plan. It aims to help save Rs 60,000 crore annually in the country’s oil import bill by 2020.
Besides, the Ministry will also look to put in place in 2016 a new Capital Goods policy with a long-term, stable and rationalised tax and duty structure to promote the sector, which is one of the most critical segments in the ambitious ‘Make in India’ programme.
Besides, progress is also expected in the New Year on closure of some sick public sector units including three units of HMT and Hindustan Cables.
The year passing-by saw the Ministry launching the ‘FAME India’ scheme offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars, aiming to promote use of eco-friendly vehicles.
The first phase of the scheme is being implemented over a two-year period in 2015-16 and 2016-17 with an approved outlay of Rs 795 crore, out of which Rs 500 crore will be spent on demand incentives.
As per the scheme, depending on technology, battery operated scooters and motorcycles will be eligible for incentives in the range of Rs 1,800 to Rs 29,000, while for three-wheelers, it is between Rs 3,300 and Rs 61,000.
For four-wheelers, the incentives range from Rs 13,000 to Rs 1.38 lakh, while in light commercial vehicles it ranges from Rs 17,000 to Rs 1.87 lakh, and for buses it is Rs 34 lakh to Rs 66 lakh.
The year also witnessed the unravelling of a global emissions scandal involving Volkswagen, and questions began to be raised over whether vehicles sold in India by the German auto maker too were affected. This prompted the Heavy Industries Ministry to order a probe by testing agency ARAI to ascertain whether the Indian emission norms were manipulated.
The investigation found that engines of VW vehicles sold in India were fitted with a software designed to cheat emission norms, leading to discrepancies in emission levels recorded on-road and in laboratory conditions.
The findings led to a showcause notice being issued by the Government to Volkswagen, and the subsequent recall of 3.23 lakh vehicles by the auto major in India.
The probe findings also led to all diesel passenger vehicles in India coming under the scanner, with the Heavy Industries Ministry asking the Automotive Research Association of India (ARAI) to start testing all on-road diesel vehicles in India to check if they too are flouting emission norms.
The capital goods policy, expected to be unveiled in 2016, aims to increase domestic employment from the current 15 lakh to at least 50 lakh by 2025 thus providing additional employment to over 35 lakh people.
The policy is formulated with the vision to increase the share of capital goods contribution from present 12 per cent to 20 per cent of total manufacturing activity by 2025.
Stressing on creation of an ecosystem for globally competitive capital goods sector, it proposes uniform customs duty on imports of all capital goods related products.
It also proposes allowing up to 50 per cent CENVAT credit to manufacturers using such products as raw material or intermediates for further processing or using such goods in the manufacturing of finished goods.
It pitches for adoption of uniform Goods and Services Tax regime ensuring effective GST rate across all capital goods sub-sectors competitive with import duty after set-off with a view to ensure level playing field.
In 2016, the Government may decide to close down four sick units under the Heavy Industry Ministry, including HMT Watches, HMT Chinar Watches, HMT Bearings and Hindustan Cables.
The Cabinet had earlier given in-principle approval for shutting down these four units along with Tungabhadra Steel.
The Heavy Industry Ministry has firmed up individual proposals entailing their closure formalities like VRS package, etc., while the individual proposal related to closure of Tungabhadra Steel is said to have already secured a Cabinet nod recently. (PTI)
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