The government has taken a major decision to increase the sales of electric vehicles by offering a subsidy of around Rs 1.4 lakh for each electric vehicle. This move will bring back grin on the faces of Mahindra and TATA motors. Both of them recently launched their electric vehicle, which is growing with the snails’ speed in the Indian market.
Budget allocation of Rs4,500 cr
On August 23rd the decision was taken and soon after it, the Ministry of Finance has decided to raise allocation of subsidy on electric vehicles to Rs 4,500 crore under phase 2 of the Faster Adoption and Manufacturing of Electric and Hybrid vehicles (FAME) scheme.
Buyers get subsidy of Rs1.4 lakh
All the buyers of existing electric car model from Tata and Mahindra can expect to get a subsidy of around Rs 1.4 lakh. The subsidy is likely to be capped at 20 percent of the cost of the vehicle. This would enable the buyers to get the subsidy of maximum 4 lakh for certain high-end electric cars. The buyers can enjoy subsidies on such models which are not yet introduced to Indian roads. The subsidy will also be extended to the buyers of electric two-wheelers and three-wheelers.
Total Fund Allocation is Rs5,500 cr
A high-powered committee for FAME has decided to allocate an additional Rs 1,000 crore for setting up charging infrastructure, taking the total fund allocation to Rs 5,500 crore.
Government’s targets EVs share to 40% by 2030
In 2016-17, the data showed the presence of 2,000 electric cars in India and three million conventionally-fuelled ones, while there were about 23,000 electric two-wheelers against more than 16 million fuel based two wheelers. The target of the Government is to increase the share of electric vehicles in the market from the current one per cent to 40 per cent by the year 2030.