MUMBAI: India increased state support to the production of electric and hybrid cars by 42% in the Budget, underscoring the government’s intent to improve air quality in a nation that is home to some of the world’s most polluted urban centers.While there was no specific mention of cleaner cars by Finance Minister Arun Jaitley in his Budget speech, ET learns from the annexures that a government programme promoting electric vehicles got both a time extension and bigger funds. The programme on Faster Adoption of Manufacturing of Hybrid and Electric Vehicles, which goes by the acronym FAME, got Rs 175 crore for FY-18 versus Rs 123 crore in FY-17. When the policy was announced in FY-15, the government had allocated Rs 75 crore: The support has been increasing to reflect growing industry interest.Pawan Goenka, MD at utility vehicle maker Mahindra & Mahindra, told ET that such cars will likely have increasing acceptance, although current output remains low."I am counting this year being the year of electric cars. Mr Goyal (India’s power minister) has announced that he would want the government of India to source 1 lakh electric vehicles, and he has also announced that by 2030 all vehicles will be electric. The chairman of Softbank has already mentioned that he would like to donate 1 lakh electric vehicles to Ola. Even if 10% of that happens, the landscape for electric vehicles will change. The FAME scheme is a good trigger in this direction."There are about half dozen vehicles that get subsidies from the government and there are a dozen more cars - electric, hybrid and mild-hybrids – that are lined up by vehicle makers to take advantage of the scheme. Toyota's premium sedan Camry and Prius get incentives from the government, while M&M's electric vehicle portfolio includes E2O and Verito. The country’s biggest carmaker, Maruti Suzuki, has been the largest beneficiary of the programme, with more than 1 lakh vehicles already plying on Indian roads.M&M on its part is working on the cheapest electric SUV in the world, codenamed S107. It is the electric version of KUV for the Indian market and it is alternatively also pushing Verito electric in the fleet to gain economies of scale.Although the FAME subsidy is higher for electric cars, hybrid vehicles get the bigger share in practice. Maruti Suzuki, for instance, introduced a 12-watt hybrid in Ciaz and Ertiga that helped the company get both subsidies and competitive positioning. M&M too eventually introduced a mild-hybrid version of Scorpio and there is a hybrid version of XUV too in the planning pipeline.South Korean car maker Hyundai Motor India too plans to bring in mild-hybrid systems in the new generation Verna, Creta and probably in Tucson SUV. At present 12 watt milder hybrids are available in the market. The next big shift will be toward 48 watt hybrid system in the market.Anant Geete, minister of Heavy Industries and Public Enterprises, who announced the scheme in New Delhi in 2015, had said under FAME, India would sell 6-7 million hybrids and EVs annually in the six year period. The aim was to support the electric vehicle market development and manufacturing eco-system.