India’s electric vehicle (EV) incentive programme, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), has come under scrutiny after a Comptroller and Auditor General of India (CAG) performance audit identified irregularities in the disbursement of demand incentives. The report found that five electric vehicle manufacturers received incentives worth ₹467.96 crore despite violating localisation requirements under the Phased Manufacturing Programme (PMP).
The CAG’s Performance Audit Report No. 10 of 2026 was tabled in Parliament on August 12, 2026. It reviewed the implementation of both FAME-I and FAME-II and highlighted several weaknesses in incentive administration, testing and certification, charging infrastructure, e-bus monitoring and other components of the programme. FAME-I was launched in April 2015, while FAME-II operated from April 2019 to March 2024 with its outlay increased from ₹10,000 crore to ₹11,500 crore.
According to the audit, the five OEMs did not comply with the prescribed PMP localisation requirements but were still granted demand incentives totalling ₹467.96 crore. The violations were subsequently identified after the Ministry of Heavy Industries directed testing agencies to conduct detailed record checks, physical inspections of manufacturing plants and vehicle strip-down analysis. Two of the five manufacturers have returned ₹190.90 crore in incentives along with interest, while recovery or deregistration action against the remaining three manufacturers is under way.
The audit also highlighted shortcomings in the Demand Incentive Delivery Mechanism (DIDM) portal used for processing FAME incentives. The CAG noted that the portal lacked complete incentive data for part of the FAME-I period and was not integrated with the Vahan and Sarathi databases for most of FAME-II. The audit further found that ₹6.78 crore in demand incentives was approved for 952 ineligible electric vehicles, excluding e-buses, in violation of scheme guidelines and notifications.
Public EV charging infrastructure was another major area of concern. Under FAME-II, only 148 of the 2,877 charging stations approved under the Cities project had been commissioned, representing about 5% of the sanctioned stations. The remaining stations under the Cities project and all 1,576 stations approved under the Highways and Expressways project were cancelled because of no or negligible progress. The Ministry had also awarded 8,412 charging stations to three oil marketing companies, but none had been commissioned as of March 2024.
The CAG also pointed to gaps in electric bus monitoring and testing procedures. During FAME-II, 5,195 e-buses were deployed against a target of 6,862, while the Ministry did not develop the envisaged central server for monitoring their performance. The audit further found that testing agencies faced delays in issuing Eligibility Assessment Reports because clear timelines had not been prescribed. Overall, the findings highlight the need for stronger verification, monitoring and implementation mechanisms to ensure that future EV incentive programmes deliver public funds effectively while supporting India’s electric mobility transition.
