The rapidly growing electric vehicle (EV) industry is eagerly awaiting announcements in the upcoming Union Budget, hoping for positive support from Finance Minister Nirmala Sitharaman in the next fiscal year.
In 2023, India’s EV sector achieved a significant milestone, selling 1.5 million units with a remarkable 46% Year-on-Year growth.
Amidst this anticipation, the EV sector is specifically requesting a reduction in the goods and services tax (GST) rates on components and an extension of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy scheme in the Budget 2024.
There’s speculation that the government might extend the second phase of FAME to help manufacturers until the FAME III scheme is approved. FAME provides subsidies for electric three-wheelers (e-3W), electric four-wheelers (e-4W), and electric buses. The Interim Budget, set to precede the final budget in July, is expected to lay the groundwork for new initiatives in the EV sector, coinciding with the formation of a new government.
Key industry players, such as Naveen Munjal, the founder and managing director of Hero Electric, express hope for continued focus on long-term policies supporting EV adoption. This includes calls for reduced GST rates, extension of FAME-II subsidies, introduction of FAME-III, and increased infrastructure spending for charging facilities.
People in the industry trusts that the government will continue the FAME scheme until they can start a new one called FAME-III. A Hero Electric spokesperson hopes the government keeps supporting EVs with long-term plans like lower taxes and subsidies. This, they believe, will make EVs more affordable and help more people buy them.
Another expert in the industry is waiting for updates on the new FAME-III scheme, special incentives, and changes in taxes for two-wheelers. They suggest having the same tax (GST) rate, 5%, for all parts of EVs, just like the tax on the vehicles themselves. This, they say, will make things fairer and better for everyone in the industry.
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