Electric vehicle industry appeals for subsidies to recharge sales
The sector is anticipating sops from the government to boost the battery and charging infrastructure, rationalise tax structure and support R&D capabilities.
New Delhi: With electric vehicle (EV) sales losing momentum following a sharp reduction in subsidies provided by the government, the auto sector is pinning hope on the third phase of the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme to find a mention in Finance Minister Nirmala Sitharaman’s upcoming FY24-25 union budget speech. The sector is also anticipating sops from the government to boost the battery and charging infrastructure, rationalise tax structure and support R&D capabilities.
“Policy measures and initiatives promoted by the government of India and state governments were instrumental in kick-starting the vehicle electrification story in the country,” said Rohan Kanwar Gupta, Vice President & Sector Head – Corporate Ratings, ICRA Limited. The rating agency expects that there could be a substantial allocation towards subsidy incentives in the Budget, both for manufacturers and consumers.
“This could include subsidies for vehicle purchases (including e-buses) as well as incentives for setting up EV manufacturing plants… Other key expectations include a reduction of goods and service tax (GST) on EVs (which is currently at 5%), correction of inverted duty structure (wherein GST on batteries is significantly higher than that of vehicles) and incentives for EV-related research and development (R&D),” added Gupta.
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