Budget 2019: An Initiative to Increase Use of Electric Vehicles
Union Budget 2019 has finally been presented and the Government of India has taken several steps for the advancement and betterment of the nation. The implementation of several budget announcements has already begun in several sectors, with the automobile industry also being one of them. As per the norms presented for the automobile industry, it is clear that the government wants electric cars on the road.
The proposals in the budget will surely increase the demand for electric vehicles. We will talk about these norms in detail but before that, we would like you to know, imported and assembled cars are now even more expensive as the customs duty has been heightened on them. Fuel prices have also experienced a rise, FAME-II policy has been approved and implemented.
So, what are the norms implemented by the government in the automobile sector?
To start with the conventionally powered cars, the prices have risen due to increased custom duty on them. Fuel prices have also been increased to make the fuel-operated cars look less attractive to consumers. The rise in fuel prices has been implemented due to the burden incurred towards the import of crude oil in FY 2017-18.
Now, let’s start with electric vehicles. At first, the Government of India had proposed a drop in GST rates from 12 percent to 5 percent, which is great news for the customers who are ready to purchase their first EV.
Secondly, along with that, an additional income tax deduction of Rs 1.5Lakhs will be offered on the loans taken to buy electric vehicles. As a result, these benefits will make EVs cheaper and attractive to consumers as well.
Manufacturers of EVs will also get benefits of the new budget as they will be eligible for deductions in capital expenditure under Section 35AD (1) of the Income Tax Act.
Last but certainly not the least, is the implementation of FAME-II Policy. FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)has shifted gear to its second phase to boost electric mobility and increase the number of electric vehicles in commercial fleets.
An outlay of Rs.10,000crores has been set aside for the next three years through which the government will incentivize electric buses, three-wheelers and four-wheelers to be used for commercial purposes.
The center also plans to invest in setting up charging stations just to provide convenience to the people of the country. The center might also incentivize the purchase of almost 7,000 electric vehicles, 20,000 hybrids, 35,000 four-wheelers, and 5,00,000 three-wheelers.
FAME 2 policies will also offer incentives to the manufacturers who invest in developing electric vehicles and its components along with lithium-ion batteries and electric motors. Along with that, the center has also asked states to frame their EV policies and make amendments to provide additional fiscal and non-fiscal advantages to manufacturers and buyers.
There has been no better time to jump on the EV bandwagon, so, go ahead and get yours today!
Sarthak Moghe is a young, enthusiastic writer who loves modern technology and automobiles. After completing his graduation in Journalism and Mass-Communication, he stepped into the world of adulting as a content writer. When not busy on the keyboard, he likes to explore new topics and hone his sense of humour.