Savings and Benefits: Exploring Government Subsidies on Two-Wheeler Loans

Get a comprehensive understanding of subsidies for motorcycle financing to benefit from government assistance in different states. The FAME scheme significantly benefits motorcycle owners, making their purchase more affordable. Explore the state-wise incentives and benefits of these schemes.

While purchasing a two-wheeler, you would be looking for cost-effective financing solutions. While banks and NBFCs offer various loans, why not explore government subsidies to further save money? With different government subsidies available for two-wheeler purchase in India, there’s a lot of scope to curtail costs. In this guide, we will check out the savings benefits exploring government subsidies for two-wheeler loans in India.

With proper knowledge of government assistance through subsidies, you can come up with a realistic budget for your new motorcycle. 

Why Take Advantage of Government Subsidies?

In India, various government subsidies are available for purchasing two-wheelers. Popular among these is the Faster Adoption and Manufacturing of (Hybrid and) Electric Automobiles (FAME) scheme, also referred to as the Electric Mobility Promotion Scheme (EMPS). Also, the government of Tamil Nadu has come up with the Amma Two Wheeler or Scooter Scheme to facilitate women purchase two-wheelers.

Most of these schemes are designed to overcome the barriers to adopt electric vehicles. In India, electric bikes and scooters are gaining popularity. To facilitate their purchase and adoption, the government has come up with these schemes.

Let’s take a look at some of the key benefits of government assistance through subsidies.

1. Reduce cost

The high ticket price for two-wheelers, especially electric bikes happens to be a barrier for customers to purchase them. With incentives from FAME, manufacturers can lower the cost of EVs, which makes them more affordable to buyers.

2. Bridging price gap

Apart from FAME incentives, other state-level subsidies further reduce the cost of electric bikes. This helps in bridging the price difference between conventional bikes and EVs. This makes electric bikes a viable and popular option for customers. 

3. Viability as an alternative transportation

Both the central and state governments offer attractive subsidies to make EVs a viable alternative to conventional vehicles. Under certain schemes, consumers are incentivized to buy EVs considering long-term sustainability and environmental impact.

Understanding subsidies for motorcycle financing

The FAME Scheme

 The FAME scheme was designed to pacify the adoption of EVs through government subsidies. This scheme was introduced under the National Mission on Electric Mobility in 2013. It applies to pure electric as well as hybrid vehicles, including bikes. Both manufacturers and consumers can benefit from these incentives. The scheme operates under the Demand Incentive Disbursement Mechanism (DIDM). This ensures a transparent allocation of subsidies based on predefined criteria.

Over the years, the FAME scheme has undergone different phases. In April 2015, the initial phase was designed. The amount of subsidy on bikes depends on different factors like technology, battery parameters, and vehicle category.

The FAME II Scheme

Over time, the FAME Scheme was modified, and eventually, it came to be known as the FAME II Scheme. In India, different states have their own subsidies and policies for EVs, including motorcycles. With these state-level subsidies, buyers can further save money while buying electric bikes.

State-Level Subsidies in India

 Now, let’s have a look at government assistance through subsidies for purchasing two-wheelers in different states in India.

1. Delhi

In Delhi, the government offers a subsidy of INR. 5,000/kWh on electric two-wheelers, capped at INR 30,000. Additional incentives include scrapping incentives, waiver of registration charges, and road tax on electric bikes.

2. Maharashtra

 The government of Maharashtra offers an incentive of INR 5,000/kWh for all vehicle categories, with an early bird discount. For electric bikes, the maximum subsidy is INR 10,000.

3. Gujarat

 In Gujarat, the subsidy amount is the highest, at INR 10,000/kWh. Two-wheeler owners can enjoy a maximum subsidy of INR 20,000.

4. Telangana

 While not offering direct subsidies, the government of Telangana offers exemption on registration and road tax for electric bikes.

5. Karnataka

The government here offers subsidies under the FAME scheme and an additional capital subsidy of 15% for investing in the EV sector. 

6. Other states

 The governments in other states like Odissa, Rajasthan, West Bengal, Assam, and Meghalaya also offer different discounts and subsidies on two-wheelers.

 Amma Two Wheeler or Scooter Scheme in Tamil Nadu

The government of Tamil Nadu launched the Amma Two Wheeler or Scooter Scheme in February 2018. It empowers working women, especially those from underprivileged backgrounds to own their two-wheelers. 

As per the scheme, eligible applicants get a discount of up to 50% or INR 25,000, whichever is lower, on purchasing two-wheelers. 

Moreover, it empowers differently-abled women to purchase retrofitted three-wheeler scooters. The remaining cost can be paid through a bank loan or savings.

 Impact of Government Assistance through Subsidies

If you are planning to get a bank loan to purchase two-wheelers, these government subsidies can bring significant benefits to the table.

• Reduced overall cost: With subsidies from the government, you can reduce the upfront cost of purchasing two-wheelers. Considering the higher cost of EVs, these subsidies make your purchases more affordable.
• Better loan terms: Some banks may offer special loan terms or incentives for financing electric vehicles. This further enhances your benefits and savings.
• Environmental impact: Given that most of these subsidies are applicable to the purchase of EVs, you eventually contribute to environmental sustainability.

Wrapping Up

Government subsidies on two-wheelers, particularly electric bike makes them more accessible. As a borrower, you can make substantial savings and enjoy affordable financing, thanks to government assistance. 

Depending on the state you are in, your eligibility for these subsidies differs significantly. Nevertheless, if you are willing to take a stride towards a greener future, you can benefit from subsidies.