On Friday the 1st, Piyush Goyal, the Union Finance Minister presented the country with its Interim Budget. A lot many in the country were glued to their seats waiting for something consequential to be announced. In its last budget presentation, before the general elections are held later this year, the BJP government did, in fact, give the countrymen lot to be happy about. Starting with major tax relief for the middle-class, the Finance Minister went on to discuss the future of Electric Motor Vehicles in India. The automotive industry has been one of the fastest growing industries in the history of mankind, one which man has been trying to perfect since the discovery of the wheel. From the days of Enzo Ferrari and Henry Ford showcasing human ingenuity at the start of the 20th century, the world has since then moved onto Electric Cars-with Elon Musk’s Tesla leading the charge. However, up until now, there were no incentives to bring Electric car manufacturing companies to move their production to India which now the Indian Government hopes to change. What are these new plans and how will they be implemented? Let’s find out!
Why are Electric Cars important for the future?
A report released by a US Publication Wards Auto put the total number of cars in the world at more than 1 billion in 2011. And in the last decade, the number has only grown higher. It is not hard to imagine the adverse effects such a high number of pollution producing cars have on the environment, and with more and more people buying cars every day, there seems to be no immediate respite.
Vehicles have become a necessary part of our daily lives and to live without one seems almost unthinkable. However, the rising rates of asthma cases and melting glaciers paint a rather grim picture of the current state of the planet, and if this trend continues, mankind may not be around a century or two from now. So how can we help save the planet and drive to work at the same time? The only solution to this conundrum seems to be Electric Motor Vehicles, and the Indian Government seems to agree. During the Interim Budget, Union Finance Minister Piyush Goyal hailed Electric Cars as the future of the Automotive Industry. To find out more, keep reading!
Interim Budget 2019- What did Piyush Goyal say?
During the interim budget on Friday, Finance Minister Piyush Goyal proposed a 10 point vision for the future of the country, setting the tone for the upcoming 2019 Lok Sabha Elections.
The Finance Minister started the presentation with the catchphrase, New India 2030 which included a promise to make India an energy independent nation by limiting the import of crude oil from the Gulf and increasing use of Electric Vehicles in India. The budget brought forth the commitment to making electric vehicles more affordable by incentivizing electric motor vehicle production in India and decreasing import duties for vehicle parts.
The Indian Government had already tried to promote Electric Vehicles in the past with Phase 1 of FAME( Faster Adoption and Manufacturing of Electric Vehicles ) during with a Rs 795 Crore incentive plan was laid out for EV manufacturers, however, no clear directives were issued by the government which led to a low-investor turnout. In the Interim Budget presented on Friday, the Finance Minister introduced Phase 2 of FAME to the public which included some major changes in the financial workings of the country.
Incentives of worth Rs 5500 crore have been laid out in Phase 2 of FAME. Now, instead of the previous 15-30 per cent import duty on vehicle components, only 5-10 per cent will be charged. Importing an already assembled Electric Car in India used to cost 100 per cent of the price of the car, which has now been reduced to just 25 per cent. This clear level of distinction in import duties shows a clear vision from the Government and car manufacturers abroad like Tesla will be pretty happy with the way things turned out on Friday. Moreover, the Modi Government announced its vision of energy security with a focus on renewable energy as the main source of recharging electric vehicles. The government estimates 30 per cent of Indians will be driving electric vehicles by 2030 under the New India Scheme.
Its impact on India and it’s Automotive Industry
With such strong convictions of the government, there seems to be no doubt in our minds that there is indeed a future for Electric Motor Vehicles in India. With the change in policy, new companies will be eyeing the Indian market in the coming months. And Indian companies like Tata will find developing electric vehicles in India a lot easier under the “Make In India” campaign which already provides subsidies for India based manufacturing companies. A lot of Indians will be looking to get their hands on imported Electric Cars as well, as they become more affordable due to lower import taxes. For example, the Tesla Model 3 costs about 23.2 lakh rupees in the US and in India, it is double that. So with the new phase of FAME announced by the Finance Minister, the likes of Tesla will see a huge boost in sales and this may lead to other companies following suit and moving their production to India.
Moreover, as India moves towards becoming a true superpower, Energy independence will be important for its future. With the increasing instability in the Gulf, it is unwise to stay dependent upon them for sources of energy for long (81 US Billion Dollars worth of crude oil is imported every year from the Gulf to Indian shores). And so India relying with being the first country to lead the transportive revolution by mobilizing the country to adopt eco-friendly Electric Motor Vehicles, India will prove as a beacon for other countries to follow suit and lead the charge against Global Warming. We at Social Cube commend the Indian Government in its effort to make India a true economic power by thinking outside the box and wish them the best of luck. This is a step forward in the right direction, and we hope the folks who make the decisions keep fighting the good fight. Thank You for reading folks!