India

Going electric: on plans to switch to electric vehicles

The budgetary measures can speed up India’s plans to switch to electric vehicles

The Union Budget has announced a bold move to make a transition to electric vehicles, and offered a tax incentive for the early adopters. Its stated vision to leapfrog into an era of electric mobility and domestic vehicle manufacturing, led by public transport and commercial vehicles, is forward-looking. It is also inevitable because poor air quality and noise pollution have sharply affected the quality of life, and pose a serious public health challenge. As the NITI Aayog has stated, the goal of shifting to electric vehicles cannot make progress without deadlines, and a market-driven approach sought by some sections of the automotive industry will leave India’s capabilities and infrastructure for e-mobility trailing others, notably China. With 2030 as the outer limit, the imperative is to fix a realistic time-frame by which scooters, motorcycles, three-wheel carriages and, later, all new vehicles will be battery powered. An additional income tax deduction of ₹1.5 lakh is now offered on interest paid on loans to purchase electric vehicles, and the GST Council has been moved to cut the tax on e-vehicles to 5% from 12%. Both demands were made by the industry earlier. There is a significant outlay under the second iteration of the Faster Adoption and Manufacturing (of Hybrid and) Electric Vehicles (FAME) plan of ₹10,000 crore, to give a fillip to commercial vehicles and to set up charging stati

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