E-Vehicles To Come Under Priority-Lending, R&D Incentives in Budget 2019
While Modi-government has made clear and committed plans for bringing electric vehicle (EV) revolution to India, the industry expectations from the Union Budget 2019-20 run high. Among the key demands are priority-lending by PSU banks for purchase of EVs and raising government subsidy to push sales.
“Today, nobody is giving loans to electric vehicles. Some instruction should be given by the RBI to public sector banks for priority-lending to the EV sector. Then, a clean air campaign should be launched on the lines of Swachh Bharat to raise awareness,” Sohinder Gill, President, Society of Manufacturers of Electric Vehicles (SMEV) said. The other proposal for the Budget is higher subsidy for people buying electric vehicles and incentives to corporates for bulk-buying of green vehicles.
Gill said that the government does not need to provide financial assistance. By simply re-introducing the principle of “polluter pays”, it can levy a small green cess and raise funds. Seeking tax incentives, the e-vehicle sector has argued that these would boost the government’s flagship manufacturing scheme Make in India and drastically cut down vehicular pollution in the country. The Modi government wants to hasten the adoption of green vehicles. Its think tank Niti Aayog has put forward a plan to shift to e-mobility for two-wheelers (below 150 cc) and three wheelers by 2025.
“EVs shall serve the dual purpose of improving the health of the Indian economy by improving the manufacturing sector, generating employment as well as the environmental health of our country,” said Rakesh Nangia, Managing Partner, Nangia Advisors (Andersen Global). India has so far been rather slow in adopting green vehicles for reasons ranging from poor infrastructure, low speed to unaffordable prices. The share of electric vehicles out of total annual vehicle sales in the country is less than 1 per cent. Major players in the electric vehicle space, include Hero Eco, Mahindra Reva, Electrotherm, Avon, Lohia and Ampere among others.