Indian govt to take legal action against EV makers for subsidy misuse: Report

The Indian government is reportedly contemplating legal action against three electric vehicle (EV) manufacturers, including Hero Electric, Okinawa Autotech, and Benling India. 

According to an ET report, These companies are accused of not repaying subsidies they improperly claimed under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) scheme.

Despite multiple attempts by the Ministry of Heavy Industries to reclaim the funds, the companies have yet to return the amounts, leading to the consideration of involving investigative agencies for a deeper probe.

The role of investigative agencies

To address the subsidy misuse under the FAME scheme, the government may enlist the Central Bureau of Investigation (CBI) or the Enforcement Directorate. These agencies could conduct an in-depth investigation to determine if there was criminal intent behind the actions of the accused companies. 

The ET report quoted: “The ministry may also enlist the help of investigative agencies such as the Central Bureau of Investigation (CBI) or the Enforcement Directorate for an investigation into the fraudulent activities related to the FAME scheme and establish criminal intent."

Aims to recover over Rs 300 crore 

The Ministry of Heavy Industries aims to recover significant amounts from the accused companies: approximately Rs 155 crore from Hero Electric, Rs 125 crore from Okinawa, and Rs 50 crore from Benling, India.

These figures represent the subsidies wrongly claimed by the companies, and the amounts could increase if the dues remain unpaid.

Company responses to the allegations

In response to the allegations, Benling India and Hero Electric have defended their adherence to the FAME II scheme guidelines. Benling India's CEO, Amit Kumar, stated that the company sold 29,803 electric two-wheelers under the scheme but received subsidies for only 19,986 vehicles, leaving an uncleared subsidy amount of Rs 42.48 crore with the government.

Hero Electric has been in discussions for over 18 months, offering proposals and evidence of compliance. Okinawa Autotech mentioned that the matter is currently sub judice, awaiting further instructions from the high court.