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News and Trends

#Budget2019: FM Announces Incentives on EV Purchases

The FM announced the government's aim to make India a "global hub of manufacturing electric vehicles"
#Budget2019: FM Announces Incentives on EV Purchases
Image credit: Quartz, Entrepreneur India
Feature Writer
2 min read
Opinions expressed by Entrepreneur contributors are their own.

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The 2019 budget is out and brings in a slew of changes, modifications in the Indian economy. Finance Minister Nirmala Sitharaman emphasized at length on how they plan to reach USD 5 Tn benchmark in the next 5 years. 

Sitharaman clearly and eloquently also emphasized the role of electric vehicles in the budget, marking them significant and as an essential and paramount sustainable mobility option. 

“Global Hub of Manufacturing Electric Vehicles”

Electric Vehicles, which are India’s newest obsession, have seen a significant amount of growth with numerous industries mushrooming in the sector. The Finance Minister urged Indians to move towards this form of transportation while announcing a series of benefits that will be bestowed on the buyers. 

She has also said that the government aims to make India a “global hub of manufacturing electric vehicles” inclusive of solar batteries and charging stations 

Sitharaman also spoke about the handsome sum of INR10,000 crore allotted with effect from April 1, 2019, for over a period three years for electric vehicles to encourage faster adoption of EV by promising “upfront incentive on purchasing EV” and establishing the necessary infrastructure for charging stations.

Bhavish Aggarwal, Co-founder & CEO of Ola, pointed out, "The Government’s focus on Electric Mobility and EVs in the Budget 2019 is inspiring. Lower GST rate, interest subvention for EV loans and the commitment of Rs. 10,000 cr towards FAME 2 are encouraging. This further reinforces Ola’s mission to build Electric Mobility for India and the world and contribute toward making our nation, the global hub for innovation in this space."

Make EV a One-Step Alternative For All

The aim of this scheme is to provide affordable and environment-friendly transportation options for the common man, she also added. 

When it comes to EV purchases, the next question that pops in the mind of a potential EV buyer is related to the loans and taxes. Easing the concerns related to these, Sitharaman also further notified that in order to make Ev purchases a more affordable option, the government has decided to add an income tax deduction of 1.5 lakhs on the interest paid while taking loans on such purchases. This will, calculably, result in reaping the benefit of INR 2.5 lakh. She also added that GST on electric vehicles has been brought down from 12per cent to 5per cent. 

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