Union Budget 2019 India: There are major subsidies as well as incentives given on an electric vehicle as well as its adoption while the IC automobiles have no exemptions
Budget 2019 India: The Union Budget 2019 presented today by finance minister Nirmala Sitharaman, had mixed news for auto enthusiasts. Electric vehicle manufacturers can now rejoice as the proposed budget aims to take in Niti Aayog’s advice and fast track implementation of e-vehicles. The government’s think tank as they like to call themselves, had initially proposed that all manufacturers should switch to only electric vehicles by 2025. This was met by a staunch opposition from players like Bajaj Auto and TVS.
The good bits
For faster adoption of electric vehicles, the government plans to lower the GST on e-vehicles from 12 per cent to 5 per cent. Moreover, Rs 1.5 lakh tax exemption will be given on loan taken for the purchase of an electric vehicle. Not only this, there will also be an “upfront incentive” on purchase of an EV. To boost the growth, the government will invite global companies in various sectors to invest in mega manufacturing plants for batteries as well as EVs. There is also a greater focus on start-ups an the investment done in them will be exempt from taxes. More than 6 crore e-vehicles will be sold in India by 2030 as per a report by Niti Aayog. It is being said that the FM’s proposal will be a major fillip for the adoption of EVs here. More than Rs 10,000 crore subsidy will be given on the FAME II scheme as well as on charging infrastructure. This should make buying an EV even easier in terms of the price. That the FM intends to make India a global manufacturing hub for EVs isn’t lost here.
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The not-so good bits
There was no talk about lowering GST for the conventional powered vehicles. As it is, the industry is reeling under a negative growth at the moment. Inventories are piling up while sales have been really slow. The BS-VI adoption will only increase prices and thereby will again likely have a negative impact.
Sitharaman also said that she proposes to levy additional excise as well as road infrastructure tax on petrol and diesel. The increase will be by Rs 1.
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