Tuesday, September 27, 2022

#Budget2019: Govt aims to develop India as a global hub for EV manufacturing

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New Delhi: The Union Budget has outlined various proposals for giving a boost to manufacturing of electric vehicles and developing India as a global hub for the sunrise industry. In her maiden budget speech in Parliament on Friday, Union Finance Minister Nirmala Sitharaman said that under Phase-II of the FAME Scheme, only advanced battery and registered e-vehicles will be incentivised, with greater emphasis on providing affordable and environment-friendly public transportation options for the common man.

‘Aim is to encourage faster adoption of electric vehicles’

The main objective of the scheme is to encourage faster adoption of electric vehicles through upfront incentive on purchase of such vehicles and also by establishing the necessary charging infrastructure for the same. The second phase of FAME has an outlay of Rs 10,000 crore for a period of three years, and has commenced from April 1 this year.

The Finance Minister has 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 to turn India into a global hub for manufacturing of these vehicles.

Tax cuts to popularise EVs

The Finance Minister also said that the government has already moved the GST council to lower the GST rate on electric vehicles from 12 percent to 5 percent. Also to make electric vehicles affordable to consumers, the Union Budget said that the government will provide an 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.
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5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles.

To further incentivise e-mobility, customs duty is being exempted on certain EV parts.

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