A recent Comptroller and Auditor General (CAG) report has found that ₹468 crore in incentives under the FAME scheme were disbursed to five electric vehicle manufacturers that did not comply with prescribed localisation requirements. The audit also pointed to significant delays in the rollout of public EV charging infrastructure, with less than 6% of the sanctioned charging stations in cities becoming operational.
A performance audit by the Comptroller and Auditor General (CAG) of India, tabled in Parliament on August 12, 2026, has raised concerns over the implementation of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme. The report identified irregularities across both Phase I and Phase II, highlighting gaps in subsidy administration and delays in the development of planned electric vehicle charging infrastructure.
At the center of the financial findings is the improper disbursement of approximately Rs 468 crore in demand incentives. According to the audit, five original equipment manufacturers (OEMs) received these funds despite failing to comply with mandatory Phased Manufacturing Programme (PMP) norms. These regulations require companies to maintain a specific level of domestic value addition to qualify for government subsidies. The report noted that while the government has initiated recovery processes, the lapse highlights gaps in the ministry’s internal validation controls for incentive claims.
The audit also pointed to significant execution failures in public charging infrastructure. Out of 2,877 city charging stations sanctioned under the scheme, the report found that only 148 had been commissioned by the implementing agencies. The lack of a clear roadmap and inadequate oversight led to projects being awarded without sufficient due diligence, resulting in funds being tied up in unfinished sites. This slow rollout is a critical bottleneck for the broader EV ecosystem, as insufficient charging access often dampens consumer confidence and adoption rates.
Beyond subsidies and infrastructure, the CAG identified technical shortcomings in the Demand Incentive Delivery Mechanism (DIDM) portal. The report stated that the system lacked proper integration with government vehicle databases, such as Vahan and Sarathi, which weakened the ministry’s ability to verify claims in real-time. Furthermore, promises to establish a central server for monitoring the performance of electric buses were not met, limiting the government’s ability to track the efficiency and operational status of supported fleets.
For investors and industry stakeholders, the findings could signal tighter compliance and monitoring requirements across India’s EV sector. Stricter verification of incentive claims may result in greater scrutiny of manufacturing processes and potentially affect the timeline for subsidy disbursements. As the Ministry of Heavy Industries responds to the audit observations, industry attention is likely to remain focused on the pace of public charging infrastructure deployment and whether future incentive programmes adopt stronger, technology-driven validation systems to minimise compliance issues.
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