Close on the heels of unveiling a host of incentives for electric vehicles, the Union government is now urging states to promote eco-friendly vehicles in an effort to curb rampant pollution afflicting most of the major cities.
The ministry of road transport and highways has asked all states and Union territories (UTs) to provide incentives for electric vehicles (EVs).
In a letter to the principal secretaries (transport) and transport commissioners of the states and UTs on 17 July, the ministry has asked them to induct more EVs into public transportation fleets to reduce tailpipe emissions. The states have been asked to communicate by 31 August the steps being planned to promote faster adoption of EVs. A copy of the letter has been reviewed by Mint.
The ministry’s prod follows finance minister Nirmala Sitharaman announcing various measures in the 2019 budget aimed at making India a global manufacturing hub for EVs. Sitharaman announced income tax rebates of up to ₹1.5 lakh for customers on interest paid on loans to buy EVs, with a total exemption benefit of ₹2.5 lakh over the entire loan period. She also announced exemption from customs duties on lithium-ion cells to help bring down the cost of lithium-ion batteries, which are currently not manufactured in India. Also, makers of components such as solar electric charging infrastructure and lithium storage batteries can avail investment-linked income tax exemptions and other indirect tax benefits.
Meanwhile, the ministry has begun to implement initiatives to encourage adoption of EVs. These include issuing green registration number plates for all zero-emission vehicles to create a distinct identity, exempting them from vehicle permits and also approving the issuance of driving licences to prospective electric scooter drivers in the age group of 16-18 years. Currently, the learner’s licence eligibility for a private vehicle in India of 50cc engine capacity without gears is 16 years; the minimum age for a permanent driver’s licence is 18 years.
In its letter, the ministry informed the states that EV buyers would only gain if the states extend to them benefits such as waiver of toll charges, parking fees as well as priority parking slots and permit such vehicles exclusive access to the congested zones in cities.
“States are requested to take such measures so as to promote EV utilization. States are requested to create preferential policies for adoption of EVs through other incentives such as land allotment for charging infrastructure, mandating charging infrastructure in malls, housing societies and office complexes in addition to the public parking places," the ministry said.
The document suggested the need to grow the share of zero emission vehicles in shared mobility and public transport. “Since the public transport and shared mobility services typically cover higher distances, their conversion into electric would bring considerable impact on the harmful emissions in the cities," it said.
Although the ministry had exempted EVs from obtaining passenger transport permit in its October 2018 notification, most of the states have not implemented it and continue to insist on permits for EVs. Criticizing states for the lax implementation of this rule, the ministry said: “This acts as a barrier against the proliferation of EVs in passenger transport segment. States are requested to operationalize the ministry’s notification by registering EVs for passenger mobility without imposing any permit requirement."
The ministry also asked states that have not waived or reduced road tax on EVs to consider the same “to the maximum possible extent to reduce the initial cost of the vehicle to the users".
Mahesh Babu, CEO of Mahindra Electric, said the “introduction of green number plates and exempting EVs from the permit need are some of the strong steps that will boost India’s first and last-mile connectivity options."
Tarun Mehta, co-founder and CEO of Bengaluru-based electric scooter startup Ather Energy said implementing the Centre’s directives, especially those related to road tax, would be a significant benefit as it can reduce prices by ₹5,000-7,000 in the electric two-wheeler segment thereby boosting demand.
“I am particularly keen to see states start to implement policies around mandating charging points, a basic electricity connection, in the parking lots. This would be the single-biggest enabler from an infrastructure perspective for EVs," Mehta said.