Budget 2024: FAME Outlay Not Cut, Pending Liabilities Being Settled, Says TV Somanathan

In the interim budget presented by Finance Minister Nirmala Sitharaman, the subsidy allocation of the Faster Adoption and Manufacturing of Electric Vehicles, or FAME scheme, has been reduced by 48% to Rs 2,671 crore for FY25 from the earlier announced Rs 5,172 crore.

"FAME subsidy has not been cut, what's already been promised is being paid and the scheme is coming to an ending on March 31. So, what is happening is that pending liabilities, which are likely to accrue are being settled," TV Somanathan, finance and expenditure secretary, told NDTV Profit.

The Finance Minister also announced a Rs 1-lakh-crore corpus, with interest-free loans for 50 years, encouraging private sector to scale up research and innovation. Somanathan said that the details of the fund haven't been finalised yet, but the intention is to make long-term debt capital with concessional/nil rate of interest to projects that need financing.

The investment would be in the private sector and will be in for-profit projects. These projects will be focused on new technology and in areas where pay-off will take time, risks would have to be taken and conventional equity is difficult to find, he said.

While investment is an important part of the economy, Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management, said that disinvestment is just as important.

In simpler terms, he said, there needs to be a better understanding of disinvestment as it is a complex process. According to him, if the disinvestment process is conducted in a fast manner, irrespective of the value, then it may not lead to unlocking of value and instead may result in "selling it cheap".

As for the budget, Somanathan said that it is a long-term one, with a focus on 2047. He also said that though this was just an interim budget, the numbers were similar to those that would have been presented in a full budget.

Discussing the possible risks in the coming year due to global issues, he said that we have weathered worse times. However, the numbers presented are realistic. "While we are ready for a little bit of shock, we are not prepared for a large one," Somanathan said.

In terms of risks, Pandey said that there will always be a downside, but the prospects of the Indian economy look good. The way the risks are managed is quite positive, he said.