Greaves Electric Mobility refunds Rs. 124 crore FAME-II subsidy
What's the story
Greaves Electric Mobility has refunded approximately Rs. 124 crore to the Centre in subsidies obtained through the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME-II) initiative in India.
It explained, "In light of our commitment to consumer interests, to avoid protracted litigation, and without admitting to any of the allegations, contentions, or statements made (against it)."
Accused of fraud, Greaves has refunded to the Ministry of Heavy Industries (MHI) its entire incentive claim, along with the accrued interest.
Violation
There's been violation of localization mandate
Greaves is one of seven electric two-wheeler manufacturers accused by the government of selling vehicles that do not meet the local component sourcing requirement.
FAME-II guidelines stipulate that original equipment manufacturers (OEMs) must obtain 50% of their raw materials from Indian suppliers.
However, some OEMs continued to use Chinese components, violating the policy.
Greaves and six other companies were discovered to be employing imported products in breach of the phased manufacturing program (PMP) guidelines.
Subsidy
Subsidies totaling Rs. 469 crore are to be returned
In April, Greaves Electric Mobility and six other firms, namely Hero Electric, Okinawa Autotech, Benling India, Revolt Intellicorp, Amo Mobility, and Lohia Auto, were instructed to repay subsidies totaling Rs. 469 crore for violating PMP guidelines.
The government also prohibited these companies from submitting future claims under the scheme.
To recall, Revolt Intellicorp paid Rs. 50.02 crore as a penalty for violating FAME-II subsidy program guidelines in August.
Refund
Government optimistic about realignment of PMP violators
Meanwhile, following Greaves Electric Mobility's repayment of FAME-II incentives, the government is hopeful that other PMP violators will comply with the guidelines.
It will foster a more self-reliant and compliant electric vehicle manufacturing industry in India.
A high-ranking government official told Business Standard, "It's not only Greaves Electric Mobility; we are also in discussions with other companies. In the near future, they will all take similar actions."
Proposal
Hero's proposal for reduction in outstanding amount declined
Separately, Hero Electric, which owes around Rs. 133 crore, proposed a payment of only Rs. 8 crore while requesting a reduction in the outstanding amount.
However, the government has refused to accept any deduction.
Greaves Electric Mobility is now awaiting confirmation from the MHI to take the necessary steps to withdraw the show cause notice and hopes to be eligible for government incentives once more.