NEW DELHI: India’s cabinet has approved a scheme to spend $1.4 billion to subsidise sales of electric and hybrid vehicles as part of efforts to curb pollution and reduce dependency on fossil fuels.
Under the scheme, known as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), subsidies would be offered based on the battery capacity of the vehicle, ranging from buses and cars to three-wheelers and motorbikes, a government statement said. The incentives would be applicable only on vehicles costing less than 1.5 million Indian rupees ($21,177).
The benefits of the incentives will be extended to only those vehicles fitted with advanced batteries using lithium ion or other new technologies, the government said.
India, one of the world’s fastest-growing car markets, still has negligible sales of electric vehicles (EVs).
The government had set a target in 2017 for all new vehicles to be electric by 2030, but critics said the high cost of batteries and a lack of charging points were major obstacles. Carmakers also said the target was too ambitious.
The transport ministry later scaled back that target to EVs making up 15 per cent of vehicle sales in five years.
India will spend 100 billion rupees ($1.4 billion) over three years on incentives, the government said.
A source had earlier told Reuters that subsidies would amount to 10,000 rupees for each kilowatt hour (kWh) of battery capacity in a vehicle, amounting to about 50 per cent of the battery cost.
The average price of an electric car in India is now about 1 million rupees. Cars typically have a battery up to 20 kWh, so the discount under the new scheme would be 200,000 rupees.
Automakers Mahindra & Mahindra and Tata Motors both produce electric cars in India. Maruti Suzuki and Toyota Motor Co build hybrid cars.
Maruti, controlled by Japan’s Suzuki Motor Corp, last year said it would start testing 50 electric vehicle prototypes. It plans to launch EVs in India around 2020, in cooperation with Toyota.
Meanwhile, India’s economy slowed further in the latest quarter, official data showed, as the world’s largest democracy prepares for a national election and clashes with arch-rival Pakistan at the border.
GDP growth in Asia’s third-largest economy reduced to 6.6 per cent in the third quarter, a consecutive slump from 7.1 per cent in the three months to the end of September.
The numbers bode ill for Prime Minister Narendra Modi, who steamrolled to power in 2014 promising to create millions of jobs and spur economic growth but must call a general election by May.
“Numbers are disappointing and show growth trajectory slowing down and Modi government cannot do anything between now and elections,” Ashutosh Datar, an independent economist said.
The figures were blamed on weaker consumer spending and a slowdown in investment.
The Central Statistics Office also revised down its growth forecasts for the fiscal year ending March to 7 per cent from an earlier projection of 7.2 per cent.
Analysts say India needs to regularly record growth rates of at least eight per cent to create jobs for millions of Indians entering the workforce every year. — Agencies
Oman Observer is now on the WhatsApp channel. Click here
