A 14,000 crore subsidy on electric vehicles could soon become a reality in India. To patronize the sales of hybrids and electric vehicles, the Indian Government is mulling over such a move.
Traditionally, the Indian waters have been choppy for manufacturers brandishing their Electric Vehicles and Hybrids. In addition to the already pricey nature of these vehicles, the Indian Government slaps an unfair excise duty on them. This increases the prices of the vehicles manifold, and sales have been paltry as far as India is concerned. This happens even as India continues to be hit by increasing crude oil imports, and a burgeoning cry over environmental issues caused by fossil fuels.
However, that could soon be a thing of the past. As India takes a leaf out of the books of USA, UK, China and Germany, its Heavy Industry Ministry has submitted a proposal to the Finance Ministry for A 14,000 subsidy on electric vehicles and hybrids. Some of the above-mentioned countries do offer tax benefits, too.
The Heavy Industry ministry believes that the subsidy on electric vehicles and hybrids will improve their sales due to a lowering of prices. It will be routed through auto-manufacturers, and hence result in a direct passing of benefit to customers. While this may create a burden on the National Exchequer directly, it is expected to incur savings in an indirect way. This is because the more plying of electric vehicles and hybrids on streets will reduce the imports of crude oil, and thus reduce the burden on the National Exchequer in the long run.
India is definitely hard-hit when crude oil prices soar. Any instability in the OPEC Countries, like the present turmoil in Iraq, starts sending oil prices soaring. And this results in a Domino Effect across sectors like transportation, food and freight rates.
The push for such a subsidy is definitely laudable. Usage of electric vehicles and hybrids should be encouraged. It is not just for the short term benefit in the form of lesser crude oil imports, but for benefits in the long-run. These include a cleaner environment for our future generations.
Source – Economic Times