Last week’s Union budget gave a further impetus to electric vehicles. The GST on electric vehicles (EVs) was reduced from 12% to 5%. An additional income tax deduction of Rs 1.5 lakh was proposed on the interest paid for buying EVs. In addition, the budget also increased the price of petrol and diesel by Rs 2 per litre through an additional cess, creating a further nudge towards the EVs. This comes after the government initiated the second round of the Faster Adoption and Manufacturing of Electric Vehicles in India, also known as FAME scheme. FAME 2 has an allocation of the Rs 10,000 crore and looks to bring 15 lakh electric vehicles in India in the next three years.
One of the main reasons for pushing EVs is increasing air pollution. India houses 14 out of the world’s 15 most-polluted cities. The IQAir AirVisual and Greenpeace data found Gurugram to be the most polluted city in the world. The Lancet Commission on Pollution and Health estimated that 25 lakh Indians lose their lives prematurely due to air pollution every year.
