New Delhi: Just fortnight before the Union Budget 2015-16, it is expected that Hybrid and electric vehicles may become cheaper. Government is considering a proposal to give incentives to manufacture of such vehicles.
Pushing Narendra Modi's ‘Make in India' campaign, the Finance Ministry is likely to allocate Rs 800 crore in the Budget to promote manufacture and sale of electric and hybrid vehicles.
The move is expected to bring down the prices and help in substantial reduction of carbon dioxide emissions by about 1.5 per cent by 2020, a senior government official told The Indian Express.
“The incentive proposal was cleared by the expenditure finance committee recently and is likely to be announced in the Budget. After the allocation is made, the scheme will be rolled out from April 1, 2015,” the official said as quoted by The Indian Express.
The promotion of the electric and hybrid vehicles is part of the National Electric Mobility Mission Plan (NEMMP) 2020, which was launched by ex-Prime Minister Manmohan Singh in 2013. The NEMMP says that government support to the tune of Rs 13,000-14,000 crore over the next five-six years would be required to make manufacturing of full range of cleaner electric vehicle technologies that include mild hybrid, full hybrid vehicles, plug-in hybrids, and pure electric vehicles.
The government will provide a subsidy of 35 per cent of the price differential between petrol and an electric vehicle to promote the purchase of hybrid and electric vehicles. However, the subsidy amount will be capped at Rs 1.2 lakh in case of cars, the official said. This will make the electric vehicles comparatively cheaper.
For instance, the current ex-showroom price of the base model of Mahindra Reva TO1, an electric vehicle, is Rs 5,95,657 in Delhi while Maruti Suzuki's Alto 800, a petrol vehicle, costs Rs 2,82,435. The difference in price is Rs 3,13,222, of which the government will pay 35 per cent to the manufacturers to reduce the price.