Step In The Wrong Direction? Government To Cancel Subsidy For Private Electric Cars!
Policy-makers justified the move, saying the government has now decided to give cash subsidies to electric vehicles used by shared-mobility operators such as Ola and Uber.
The Centre plans to scrap cash incentives currently offered to buyers of electric cars despite having incentivised these clean fuel technologies till just a few months back. The move, experts said, will further dampen sales of private electric cars.
Policy-makers justified the move, saying the government has now decided to give cash subsidies to electric vehicles used by shared-mobility operators such as Ola and Uber, "as their vehicles will run much more than private cars".
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Official sources said the government seeks to withdraw the cash incentives for private electric cars because it neither makes a "substantial difference in promoting sales nor serves the purpose of a clean environment".
Currently, the government offers a discount of up to Rs 1.3 lakh on an electric car as part of its clean-energy programme, FAME (faster adoption and manufacturing of hybrid and electric vehicles). This is being proposed to be removed in the new FAME Phase 2 draft policy drawn up by the heavy industries ministry.
While the inaugural FAME scheme had a budget of under Rs 1,000 crore, the ministry has proposed to raise it to over Rs 9,000 crore in the second phase. ¡°The real utility of electric vehicles is in public transport. How much are the private cars driven?¡± asked an official.
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The government feels that the addition of cab aggregators like Ola and Uber to the list of subsidy beneficiaries would prompt these companies to go for electrics, which offer highly-lucrative running costs as compared with conventional diesel/petrol or CNG alternatives (except for the high acquisition cost). ¡°The maximum utility for the maximum number of people will be through public transport,¡± another source said.
The stance, however, runs contrary to the broader mobility vision that the government had projected just a few months back. As pollution rises across many top cities and smog and poisonous gases are difficult to control, the government had said it wants the entire car industry in India to switch to electric by year 2030. Last year, only around 1,500 electric passenger vehicles were sold against petrol/diesel/CNG car sales of 32 lakh.
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The 2030 transition was pushed by former power minister Piyush Goel (now in-charge of railways and finance), and found strong resonance with the road transport and highways minister Nitin Gadkari. ¡°I am going to do it, whether you like it or not. I will bulldoze. Petrol-diesel banaane walon kaa band-baja bajana hai (We will take the makers of petrol/diesel engine vehicles to task),¡± Gadkari had said in September last year.
Car companies and their lobby platform Siam, had disagreed with the government¡¯s deadline for the e-switch, and have been petitioning for a more easy transition. Official sources said government will continue to give incentives on the purchase of electric buses and two-wheelers. However, for buses, incentives will be bought down. The current incentives on electric buses cover 60% of the cost of the vehicle. This will come down to 40%.
