Budget 2019: Sops for early-adopters of E-Mobility

To encourage adoption of electronic vehicles, an allocation of Rs. 10,000 crore has been approved by the Union government for the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) 2 Scheme. The scheme gives incentives to e-vehicle manufacturing companies.

Also, to give an impetus for manufacturing and use of advanced battery and e-vehicles, the government has proposed a reduction of GST on electric vehicles to 5 per cent from the existing 12 per cent. For certain parts of e-vehicles and some other electronic products, the finance minister has exempted custom duty. The government aims to create a better infrastructure suitable for the use of electronic vehicles. Better highways and state roads which will be built or maintained under the ‘Bharat Mala’ scheme will also contribute to promoting e-mobility.

To capture the attention of the citizens to e-mobility and also to generate demand for the same, a special additional direct incentive has been declared in the budget announcement. An additional income tax deduction of Rs. 1.5 lakh will be given on the amount of interest paid for the loan taken to purchase the electronic vehicle. So in total, the consumer will benefit by Rs. 2.5 lakh for the entire time period of the loan repayment.

Reacting to this development on Friday, the stock of Tata Motors closed at Rs. 160.15 per share, down by 3.06 per cent or Rs. 5.05, while the stock of Mahindra & Mahindra closed at Rs. 642.30, down by 4.41 per cent or Rs. 29.60.