The government is planning to offer a direct subsidy for each electric vehicle, in order to promote environmental-friendly vehicles. So, as of now, it is going to be a good idea to buy an electric vehicle including 2 and 3 wheelers as those buying from the Tata and Mahindra can hope to get a subsidy of whopping Rs.1.4 lakh.
According to the reports from TOI, the subsidy may get up to Rs.4 lakh for high-end electric cars, some of which are not running on Indian roads now.
The decision came in after a meeting held of a high-powered committee headed by expenditure secretary A.N Jha on Thursday as part of the second phase of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME-II).
In a meeting, the panel has advised to allocate Rs.5500 crore, which was earlier capped to Rs.4000 crore, for the five year scheme. Though, the final policy is to be endorsed by the Union Cabinet.
Earlier, Rs.700 crore was allocated for FAME-I and nearly eight times higher subsidy this time is aimed at weaning consumers away from diesel and petrol vehicles.
The subsidy is linked to the size of the vehicle’s battery, i.e., for each kilowatt hour (KwH), Rs.10,000 subsidy is allocated. In general, the existing e-cars have battery capacity of around 14 KwH that is equivalent to Rs.1.4 lakh subsidy offered by the government.
However, the government has decided to cap the number of vehicles to be benefitted under the scheme and the number is yet to be finalized.