Electric vehicle parts, e-cycles may get sops

The budget is likely to provide incentives to encourage local manufacture and Research & Development (R&D) of electric vehicle components, including lithium-iron batteries.  

The Union Budget may be given a dash of green with many environment-friendly measures to reduce the carbon footprint, official sources told The Hindu.

The budget is likely to provide incentives to encourage local manufacture and Research & Development (R&D) of electric vehicle components, including lithium-iron batteries. It is expected to promote ‘green mobility’ through sops for electric cycles. Farmers may be given subsidies to buy solar-powered water pumps for irrigation (on the cost of the set or through a low-interest/interest-free loan). This is meant to reduce farmers’ dependence on diesel-engine pumpsets and to ensure they have ‘quality’/uninterrupted power without having to rely on the ‘free power’ schemes of the States.

The sources said an increased outlay was being planned for the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India scheme, or FAME India. The last budget had an outlay of just Rs. 75 crore for FAME India. It had extended till March 31, 2016 the customs and excise duty concessions for specified parts for manufacture of electrically operated vehicles and hybrid vehicles.

Providing incentives to boost domestic manufacture of components such as Lithium-Iron batteries would in turn reduce the cost of e-vehicles and benefit consumers, the Road Transport & Highways Ministry and the Heavy Industries & Public Enterprises Ministry had argued during inter-ministerial consultations on the issue, the sources said.

Expediting steps, including through the budget, to push indigenous manufacture and design of components for electric/hybrid vehicles is also in line with the government’s ‘Make In India’ initiative and the Automotive Mission Plan.

Concerned over the high cost of imported Lithium-Iron batteries, these Ministries had said development of locally made and patented Lithium-Iron batteries could substantially reduce the price of the crucial component in e-vehicles.

At inter-ministerial consultations, there were arguments over the logic of providing sops for e-cycles when ordinary cycles themselves were environment-friendly and not consuming any fossil fuel at all.

However, the worries over increase in the use of cars and SUVs worsening pollution and the need to gradually reduce the reliance on imports of e-cycles and JVs with foreign firms were the arguments in favour of providing incentives for local development and manufacture of e-cycles.

As for solar water pumps, it was brought to the government’s notice that many farmers could not afford them because they were expensive (around Rs. five lakh). Because providing subsidy worth Rs. Five lakh to every farmer would be impractical, the Centre may go in for a subsidy-sharing arrangement with the States, or eliminate some of its existing ineffective incentives to ensure a fair allocation for subsidies on solar water pumps. Also, though many States were supplying power to farmers virtually free of cost, the quality of power was poor with outages and a sudden drop in voltage damaging the farmers’ water pumpsets. Helping farmers with subsidies could ensure that they switch to solar water pumps, thus doing away with the need to provide free power, the sources said.

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Printable version | Oct 25, 2020 3:06:57 AM |

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