Sops from this budget to fast forward Indian electric vehicles (EV) industry towards the future. Can this be possible?
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Considering our large consumer base, we aim to leapfrog and envision India as a global hub of manufacturing of electrical vehicles. Inclusion of solar storage batteries and charging infrastructure in the above scheme will boost our efforts. Government has already moved GST council to lower the GST rate on electrical vehicles from 12% to 5% and also to affordable to consumers, our government is providing additional income tax deduction of Rs. 1.5 lakh on the interest paid towards loans obtained against the purchase of electric vehicles. This amounts to a benefit of around Rs. 2.5 lakh over the loan period to the tax payers, who availed loans on purchase of an electric vehicle.” The following were the words from the recent budget speech of Hon’ble Finance Minister Nirmala Sitaraman.
Along with this Govt. has planned to review excise duty and cess on petrol and diesel. She also proposes to increase special additional excise duty on petrol and diesel by one rupee on a litre.
In addition to the aforementioned tax benefits, there is also an exemption of customs duty on import of specific components that are needed by EV manufacturers. Further, an additional allotment of funds to the tune of Rs 10000 crore were sanctioned to EV manufacturers under FAME II scheme, which also includes solar storage batteries and charging infrastructure as well. This act will certainly eliminate the use of lithium-ion cells used in EV batteries.
It is appreciated by many EV manufacturers such as CEO of Mahindra and Mahindra as these decisions certainly discourage the purchase of fossil fuel since EVs are cheaper to buy electricity. According to an estimate, the cost of import of petroleum by $300 billion a year by 2030, which alone contributes 70% (approx.) of total imports of the country. In addition, the EVs will emit far less pollution than combustion engines. This will be very beneficial to a country like ours, which has 14 out of 20 most polluted cities in the world (according to W.H.O). To my fear, the number of most polluting cities in our country may increase further in very near future.
According to a W.H.O study, around 1 lakh children of age under 5 years died in India in 2016 due to pollution and is considered to be a leading threat to child life. Pollution causes childhood cancers, poor lung function, pneumonia and other types of acute respiratory problems. The PM 2.5 (particulate matter with a diameter less than 2.5 micrometers present in air) causes more serious health concern than other pollutants (in children) and it is mostly emitted by vehicles which run on petrol and diesel. The sense of urgency to adapt electric vehicles can be sensed from this study.
India is in the path of providing incentives to electrical vehicles and for the future of road transport on par with most developed countries. But the unrealistic targets set to the Automobile industry by the Government i.e. to sell electrical three-wheelers alone by April 1, 2023 and two-wheelers alone by April 2025, may prove otherwise. These targets are more or less coinciding with the already proposed emission norms for BSVI standards by April 2020. This is a shot in arm of an already suffering sector of fossil fuel vehicles which has seen a single digit growth rate during the recent times. The Government should give sufficient encouragement and time to the said automobile manufacturers to sustain the market and roll out the EVs in a progressive manner.
It is apparent that the trend of shift from BS3 to BS4 showed that the higher growth (approx. 15%/ year) is possible even by bringing new technologies as a mandate. This has to be done in a manner where vehicle manufacturers have sufficient time to research in engineering of electric vehicles and where they can manage charger, control the motor and adapt the same into a large fleet of passenger and commercial vehicles. In this connection, it is to say that the change towards progress is inevitable and the people of our country will certainly adept to the usage of newly advent technologies if the same is abundant and affordable to the majority of the population.
It is needless to say that the dangerous environment pollution problem in our country with the usage of EVs on the roads decreases. There should be a strategy to develop the manufacture and usage of EVs by encouraging patents in manufacturing of electrical vehicles, charging infrastructure and other important processes which reduce the cost of manufacturing electrical vehicles by extending all possible helping hand to them. To attain clean and green environment globally, the Indian government need to deliberate more with multinational organisations such as BRICS, G20, UN, SAARC, BIMSTEC etc; for a greater focus and engagement in procuring technologies along with funding for adaptation of electrical transport. The realistic approach towards the future with a proper roadmap can boost India’s commitment towards obtaining clean, green and sustainable environment.