Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, said that the government is promoting electric vehicles (EV) by proposing to remove registration fees and using the Union Budget for giving an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase such vehicle.
Javadekar said his department will spend around Rs 500 crore in setting up 2,636 charging stations in 62 cities under the second phase of the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME) scheme. In the last 10 months, people have bought around 11,000 EV using FAME-II, he said on Tuesday in Rajya Sabha.
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Under the second phase of the project, which was initiated in April 2015, as many as 5,595 electric buses were sanctioned to various cities for public transport. About 2.8 lakh hybrid and electric vehicles were funded during the first phase by means of demand incentive amounting to about Rs 359 crore.
FAME-II, which started in April 2019, has a total budget funding of Rs 10,000 crore for a three-year period to promote the electrification of public and shared transport by providing subsidies to around 7,000 buses, 5 lakh three-wheelers, 550,00 passenger cars and 10 lakh two-wheelers.
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Javadekar said that the Goods and Services Tax (GST) on electric vehicles on has been reduced from 12% to 5%, compared to the 28% GST imposed on conventional vehicles.
Javadekar rejected claims that the automobile industry was battling slowdown due to the government regulations, saying norms were needed for safety, fuel economy and the environment. “The government, as a policymaker, always tries to maintain and boost the economic momentum through a package of initiatives through stakeholder consultations for comprehensive and ongoing development of the automobile sector as and when required. Some of the government’s steps to counter automobile slowdown, “he said.
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