The PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme is an ambitious initiative aimed at deploying 38,000 electric buses across Indian cities, with a strong focus on public transport sustainability.
The National Electric Mobility Mission Plan (NEMMP) 2020 is a comprehensive policy initiative launched by the Government of India to promote electric mobility, enhance national fuel security, and support environmentally friendly transportation. With a primary focus on accelerating the adoption and manufacturing of electric vehicles (EVs), NEMMP aims to position India as a global leader in sustainable transportation while reducing dependency on fossil fuels.
Key Components of NEMMP 2020
The NEMMP framework is supported by several key schemes, each designed to address specific aspects of EV adoption and infrastructure development. The most significant among them is the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME India) Scheme, which has been implemented in two phases:
FAME India Phase-I (2015-2019): Allocated a budget of ₹895 crore, focusing on demand incentives, pilot projects, charging infrastructure development, and technology platform creation.
FAME India Phase-II (2019-2024): A five-year program with an outlay of ₹11,500 crore, aiming to support large-scale adoption of EVs by providing subsidies and improving charging infrastructure.
Production Linked Incentive (PLI) Schemes for EV Ecosystem
To further support domestic EV manufacturing, the Government of India has introduced multiple PLI Schemes:
- PLI Scheme for Automobile and Auto Component Industry (PLI-Auto): Approved in September 2021, with a budgetary outlay of ₹25,938 crore to boost domestic manufacturing of advanced automotive technology (AAT) products with 50% minimum Domestic Value Addition (DVA).
- PLI Scheme for Advanced Chemistry Cell (ACC): Launched in May 2021 with an outlay of ₹18,100 crore to establish a domestic manufacturing ecosystem for 50 GWh of ACC battery production.
Government Initiatives Boosting EV Adoption in India
To accelerate electric vehicle (EV) adoption and strengthen India’s EV manufacturing ecosystem, the Government of India has introduced several targeted schemes. Three significant initiatives—PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme, and Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI)—have been launched in 2024 to support various aspects of the EV ecosystem.
1. PM E-DRIVE Scheme
Launch Date: September 2024
Budget Allocation: ₹10,900 crore
Duration: Two years
The PM E-DRIVE Scheme is a comprehensive initiative aimed at accelerating the adoption of electric mobility across multiple vehicle categories in India. This scheme extends financial support to:
- Electric Two-Wheelers (e-2W) – Scooters and motorcycles powered by electric batteries.
- Electric Three-Wheelers (e-3W) – Commonly used in public transport and last-mile connectivity.
- E-Trucks – Promoting electrification in the logistics and goods transportation sector.
- E-Buses – Reducing emissions in urban and intercity public transport networks.
- E-Ambulances – Ensuring sustainable and efficient healthcare mobility.
- EV Public Charging Stations – Strengthening charging infrastructure to enhance EV accessibility.
This scheme is designed to enhance EV penetration by reducing costs for end-users, offering incentives for manufacturers, and ensuring the development of a nationwide charging infrastructure.
2. PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme
Launch Date: October 2024
Budget Allocation: ₹3,435.33 crore
The PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme is an ambitious initiative aimed at deploying 38,000 electric buses across Indian cities, with a strong focus on public transport sustainability.
Key objectives include:
- Expanding electric bus fleets in both metro and tier-2 cities.
- Reducing urban transport emissions by replacing conventional diesel/CNG buses.
- Ensuring payment security for e-bus operators in case of defaults by Public Transport Authorities (PTAs).
The payment security mechanism is a crucial feature of this scheme, providing financial stability for private operators investing in e-buses by guaranteeing payments from government-backed authorities. This reduces investment risks, encourages participation from private players, and ensures a seamless transition toward a clean and efficient public transport system.
3. Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI)
Notification Date: March 2024
Minimum Investment Requirement: ₹4,150 crore
Domestic Value Addition (DVA) Targets 25% DVA by the 3rd year & 50% DVA by the 5th year. The SPMEPCI scheme is designed to boost domestic manufacturing of electric passenger cars, reduce import dependency, and promote India as a global EV manufacturing hub.
Key Features of the Scheme:
- Minimum Investment Requirement – Automakers must invest at least ₹4,150 crore in EV production facilities.
- Localization Target – Manufacturers must ensure that at least 25% of components are sourced domestically within three years and 50% within five years to qualify for incentives.
- Encouraging Research & Development (R&D) – The scheme promotes the development of advanced battery technologies, efficient powertrains, and indigenous production of EV components.
This scheme aligns with India’s Atmanirbhar Bharat (Self-Reliant India) vision, ensuring that the country not only adopts EVs but also develops strong manufacturing capabilities to compete globally.
Supporting Policy Measures by Other Ministries
Several ministries have contributed to EV adoption by introducing supportive policies and regulations to create a more favorable ecosystem for electric mobility in India.
Road Tax Exemptions: The government has advised states to waive road tax on EVs to reduce the upfront cost for consumers, making electric vehicles more affordable and encouraging widespread adoption.
Green License Plates: Battery-operated vehicles have been granted green license plates and are exempt from permit requirements, facilitating easier identification and promoting eco-friendly transportation.
Charging Infrastructure Expansion
Under the FAME-II scheme, ₹1,000 crore was allocated for nationwide charging infrastructure development. Additionally, ₹800 crore was sanctioned for the installation of 7,432 public EV charging stations through Oil Marketing Companies (OMCs). In March 2024, another ₹73.50 crore was allocated to upgrade 980 public fast-charging stations. As of January 2025, OMCs have installed 4,523 EV charging stations, with 251 already operational. Furthermore, 20,035 EV charging stations have been set up at OMC retail outlets through their own investments, significantly expanding the charging network across the country.
Key Regulatory Developments
Ministry of Power’s Guidelines (September 2024)
The Ministry of Power declared EV charging infrastructure as a de-licensed activity, removing regulatory barriers to setting up charging stations. It mandated electricity connections of up to 150 kW for charging stations with expedited approval processes. Public land allocation for charging stations has been enabled through a revenue-sharing model, set at ₹1.0/kWh for a period of 10 years. The guidelines also allow charging stations to operate round the clock and introduced a single-part tariff structure with a 30% discount during solar hours, encouraging the use of renewable energy for EV charging.
Green Energy Open Access Rules, 2022
These rules facilitate affordable access to renewable energy for EV charging networks, ensuring a sustainable and cost-effective power supply for charging stations.
Amendment in Model Building Bye-Laws
The revised Model Building Bye-Laws mandate the inclusion of EV charging stations in all new commercial and private buildings, integrating EV infrastructure into future urban planning and development.
These policy measures, regulatory changes, and financial incentives collectively aim to accelerate EV adoption, improve charging infrastructure, and promote India’s transition towards a clean and sustainable mobility ecosystem.
The National Electric Mobility Mission Plan (NEMMP) and its associated schemes mark a transformative shift in India’s transportation landscape. By integrating fiscal incentives, regulatory support, and infrastructure development, the government aims to make EVs more accessible and sustainable. With rapid advancements in technology, increasing domestic manufacturing, and expanding charging infrastructure, India is poised to emerge as a global leader in electric mobility, reinforcing its commitment to a cleaner, greener future.
