UPSC Prelims Practice Questions — FISCAL INCENTIVES UNDER PM E-DRIVE SCHEME

Q1. With reference to the institutional lineage of the PM E-DRIVE Scheme, consider the following statements. Which of the above is/are correctly identified?

  1. PM E-DRIVE is implemented by the Ministry of Heavy Industries.
  2. The Electric Mobility Promotion Scheme (EMPS) 2024 was subsumed into PM E-DRIVE.
  3. PM E-DRIVE was notified on 29 September 2024.
  4. PM E-DRIVE replaced FAME-II, which had been administered by the Ministry of Road Transport and Highways.
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 2 and 3
  • D. 1, 2, 3 and 4

Q2. The Electric Mobility Promotion Scheme (EMPS) 2024, which was subsequently subsumed into PM E-DRIVE, was in force for exactly how many months?

  • A. 3 months
  • B. 6 months
  • C. 9 months
  • D. 12 months

Q3. With reference to the component-wise allocation of the PM E-DRIVE Scheme's ₹10,900 crore outlay, consider the following statements. Which of the above is/are correctly identified?

  1. Demand incentives, at ₹3,679 crore, form the single largest component of the scheme outlay.
  2. Procurement of e-buses by State Transport Undertakings is allocated ₹4,391 crore.
  3. EV public charging stations are allocated ₹2,000 crore.
  4. Upgradation of testing agencies is allocated ₹780 crore.
  • A. 1, 2 and 3
  • B. 2, 3 and 4
  • C. 1 and 4 only
  • D. 1, 2, 3 and 4

Q4. Consider the following statements comparing PM E-DRIVE with the schemes that preceded it. Which of the statements given above is/are correct?

  1. PM E-DRIVE has a total outlay of ₹10,900 crore, whereas FAME-II had budgetary support of ₹11,500 crore.
  2. Unlike FAME-II, which ran for five years, PM E-DRIVE was originally notified for a two-year period.
  3. EMPS 2024, which immediately preceded PM E-DRIVE, was itself a two-year scheme.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q5. The following statements describe the mechanism by which fiscal incentives are disbursed under PM E-DRIVE. Which of the above is/are NOT correct?

  1. The incentive reaches the buyer as an upfront reduction in the vehicle's purchase price.
  2. The reduced amount is subsequently reimbursed to the OEM by the Ministry of Heavy Industries.
  3. The scheme additionally grants manufacturers an exemption from GST on electric vehicles.
  4. The demand incentive is a subsidy to buyers, not a production-linked payment to manufacturers.
  • A. 1 and 2
  • B. 3 only
  • C. 3 and 4
  • D. 2 and 3

Q6. Under PM E-DRIVE, the demand incentive first passed on to a buyer as a price cut is reimbursed to the vehicle manufacturer by which one of the following authorities?

  • A. Ministry of Road Transport and Highways
  • B. Ministry of Heavy Industries
  • C. NITI Aayog
  • D. Department for Promotion of Industry and Internal Trade (DPIIT)

Q7. Under the PLI (Automobile & Auto Components) scheme, the incentive payable to a Champion OEM is computed as a percentage of which one of the following?

  • A. The total ex-showroom price of every vehicle sold in the year
  • B. The determined (incremental) sales value of advanced automotive technology products
  • C. The upfront subsidy passed on to electric-vehicle buyers
  • D. The company's total annual turnover across all product lines

Q8. Consider the following statements distinguishing PM E-DRIVE from the PLI (Auto & Auto Components) scheme. Which of the statements given above is/are correct?

  1. PM E-DRIVE provides a demand-side incentive to vehicle buyers, whereas PLI-Auto provides a supply-side incentive to manufacturers.
  2. PLI-Auto offers an incentive of 13% to 18% on determined sales to Champion OEMs, while PM E-DRIVE offers no such production-linked payment.
  3. Both PM E-DRIVE and PLI-Auto are administered by the Ministry of Road Transport and Highways.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q9. The following statements describe the tenure and extension of the PM E-DRIVE Scheme. Which of the above is/are NOT correct?

  1. PM E-DRIVE was originally notified for a two-year period.
  2. The scheme's tenure has been extended up to 31 March 2028.
  3. The extension added two years to the original end date of 31 March 2026.
  4. This was the second extension of the scheme, taking its total tenure to six years.
  • A. 1 only
  • B. 4 only
  • C. 3 and 4
  • D. 1 and 2

Q10. Consider the following statements regarding the disbursement of e-2W incentives under PM E-DRIVE. Which of the statements given above is/are correct?

  1. ₹1,772 crore has been earmarked to incentivise 24,79,120 e-2Ws registered between 1 April 2024 and 31 March 2026.
  2. As on 31 December 2025, ₹1,703 crore had been reimbursed to OEMs of e-2Ws and e-3Ws as demand incentive.
  3. The incentive is disbursed directly as a bank transfer into the e-2W buyer's account by the Ministry.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q11. The following statements relate to the e-bus component of PM E-DRIVE. Which of the above is/are NOT correct?

  1. ₹4,391 crore is allocated for the e-bus component.
  2. A total of 14,028 e-buses are to be procured under the scheme.
  3. Procurement is to be undertaken by State Transport Undertakings/public transport agencies.
  4. The e-bus component is the smallest allocation within the scheme's total outlay.
  • A. 4 only
  • B. 1 and 2
  • C. 3 only
  • D. 2 and 4

Q12. PM E-DRIVE is linked to India's climate commitments — the 'Panchamrit' — announced at the COP-26 summit in Glasgow. How many such commitments did India announce?

  • A. Three
  • B. Four
  • C. Five
  • D. Seven