The Union Budget has outlined various proposals for boosting manufacturing of EVs and developing India as a global hub.
The Union Budget has outlined various proposals for giving a boost to the manufacturing of electric vehicles (EVs) and developing India as a global hub for the same.
Finance Minister Nirmala Sitharaman has presented the union budget for the financial year in Parliament, and from initial assessments, the budget holds a lot of positives for renewables and especially the Electric Vehicles sector.
In her maiden budget speech, Sitharaman highlighted that under Phase-II of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India Scheme, only advanced battery and registered e-vehicles will be incentivised, with a greater emphasis on providing affordable and environmentally friendly public transportation options for the common man.
Recently, Minister of Heavy Industries and Public Enterprises Arvind Ganpat Sawant had reiterated the same ideology in a written reply to the Rajya Sabha, that the second phase of the scheme will focus on supporting the electrification of public and shared transportation over the next three years.
“The main objective of the scheme is to encourage faster adoption of electric vehicles through upfront incentive on the purchase of such vehicles and also by establishing the necessary charging infrastructure for the same. Phase II of FAME has an outlay of Rs 10,000 crore for a period of 3 years and has commenced from April 1, 2019, after the first phase of the scheme ended after a four year period,” Sitharaman said.
She further added that in line with these incentives for buyers, the Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%. Also to make electric vehicles affordable to consumers, the Union Budget says the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.
“This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase an electric vehicle,” she added.
More than 6,89,13,000 two & three wheeler #ElectricVehicles are projected to be sold in #India by 2030, as per a recent report by #NITIAayog & @RMI. #Budget2019 proposals to give additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken for #EVs is timely!
— Amitabh Kant (@amitabhk87) July 5, 2019
The Finance Minister further said that the inclusion of solar storage batteries and charging infrastructure in the FAME scheme will give a boost to manufacturing, which is needed for India to leapfrog and become a global hub for manufacturing of these vehicles. To further incentivise e-mobility, customs duty is being exempted on certain parts of electric vehicles.