SMEV Seeks Explanation From MHI Regarding FAME Subsidy Refunds

Responding to reports that the Ministry has coerced an OEM to refund past subsidies, the apex body of the Indian Electric Vehicle industry, SMEV has sought clarifications from the Ministry about its claim for refund of subsidies from some OEMS who it claims did not comply with PMP norms during a later period. 

Pointing out that the basis for refund would only mean that the processing of subsidies and the official reimbursement was done faultily, it has asked for the Ministry to clarify if it intends to cancel all subsidy claims during this period for all OEMs.

The letter also seeks to question the legal basis for the refund amounts since they do not conform to any stated mechanism in the rules.

The SMEV has said that the Ministry has verified that these subsidies were passed on to customers and only then reimbursed the amounts. Why then is it seeking the subsidy back from OEMS when they have duly passed it on to customers? 

SMEV had earlier offered a solution to the issue through recovery from customers directly which would have cleaned off the subsidy slate completely.

“The Ministry is in debt to OEMs to the tune of Rs 1200 Crores. If their demand of refund of earlier paid subsidies to the tune of Rs 469 Crores is actualised, it would have recovered Rs 1669 Crores in all making its budget of Rs 2000 Crores for the E2W sector almost undisbursed. In that case, the non-compliance would become a non-issue – although the FAME 2 scheme would have proved to be a complete non-starter”, said the spokesperson for SMEV.

Responding to the news of an OEM being forced to refund the subsidy, SMEV said, 

“SMEV holds the view that MHI's claim for subsidy refunds lacks a valid basis. Any actions taken by MHI in this regard are contrary to established norms, practices, and policy rules. These actions are unlikely to withstand legal scrutiny.

SMEV expresses understanding for OEMs that may feel pressured to comply with this irregularity. We believe that this situation may eventually create embarrassment for the Ministry and may eventually be rectified. 

However, if any OEM has engaged in misrepresentation or misappropriation and acknowledges it, as was the case with four OEMs previously, SMEV refrains from commenting, and such OEMs may pursue settlements as they see fit.”