India may spend Rs 1,400 crore over the next two years on incentives and subsidies for makers and buyers of electric vehicles as part of an effort to have at least six million electric vehicles on the countrys roads by 2020. Mint has reviewed the details of the scheme that involve spending a total of Rs 24,000 crore till 2020 towards achieving this objective. Of this, Rs.14,000 crore will come from the government. The auto industry is expected to spend the rest in research and development of electric vehicles. The scheme, details of which may be part of the Union Budget this year, is also expected to improve Indias standing in global climate change discussions.
The details reviewed by Mint suggest that the finance ministry has asked the department of heavy industries to devise ways to track incentives and subsidies online. For a country like India which depends on imported oil, electric vehicles make eminent sense from the energy security point of view. It also has huge climate change benefits if we dovetail it with renewable energy. Electric vehicles are the future and government should invest in this technology for energy security and climate benefits, said Chandra Bhushan, deputy director general, Centre for Science and Environment. The scheme will be funded by tapping allocations to other existing schemes, such as the National Urban Renewal Mission (NURM) under the ministry of urban development and the climate change fund of the ministry of environment. In 2013, then prime minister Manmohan Singh unveiled the ambitious National Mission Plan for Electric and Hybrid vehicles.
Two years on, there isnt much to show for it. Chetan Maini, founder and chief executive, Mahindra Reva Electric Vehicles Pvt. Ltd, said the national mission has been a delayed process. I hope it gets implemented sooner, Maini said in a phone interview. A strong policy in China resulted in electric vehicle sales going up 500% and crossing the number of such vehicles sold in the US. The same thing happened in Norway and the UK, he added. Maini described the governments plan as holistic. If the government announces it sooner, it will send out a strong signal and bring in investments on supplier side and energy side.
The government expects the electric vehicles to help the country save 2.2 million tonnes (mt) to 2.5 mt of liquid fuel, valued around Rs.14,000-15,000 crore. It also sees them reducing the countrys carbon dioxide emissions by up to 1.5%. In the next two years, the government hopes the policy will help facilitate sales of at least 800,000 electric vehicles, led by the sale of two- and three-wheelers. India is the third most polluting country in the world, after the US and China, which have signed a major bilateral climate deal in November, wherein the US will reduce its emissions by 26-28% below its 2005 level by 2025 and China will reach the peak of its harmful carbon dioxide emissions around 2030.
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