Prime Minister Narendra Modi's government today presented the final budget of its second phase. Union Finance Minister Nirmala Sitharaman made some big announcements while presenting the General Budget for the financial year 2024-25 in the Parliament today, in which it was talked about developing a better eco system regarding electric vehicles. So let us know what the auto sector has got in this budget?
Finance Minister Nirmala Sitharaman said that our government is working on developing a better electric vehicle eco system in the country. In the coming time, our government will expand and strengthen e-vehicles. An eco system will be created to support the manufacturing and charging of electric vehicles. Greater adoption of electric buses for public transport and expansion of the electric vehicle network will be encouraged.
Emphasis on EV Infrastructure:
In this budget, the government has claimed to work towards improving the electric vehicle infrastructure. However, no individual major announcement has been made in the direction of electric mobility. But the government has talked about setting up charging centers for electric vehicles and also training the youth for this skill. This interim budget of the Modi government has mainly focused on rural, agricultural sector schemes and women.
What were the expectations:
In this interim budget, vehicle manufacturers were expecting more incentives on the electric vehicle (EV) segment. The industry which has seen continuous growth in the last one year, especially the sales of electric vehicles, has seen tremendous growth. In such a situation, the auto industry had its eyes set on the FAME scheme, which provides significant subsidies for electric vehicles. With the FAME II subsidy set to expire this year, the industry was hopeful that it would be extended and the proposed Rs 40,000 – 50,000 crore for FAME III would be a positive step.
Tax on Lithium Battery:
Lithium ion (Li-on) batteries are most commonly used in electric vehicles. Generally, the price of battery in an electric four-wheeler can be around Rs 40 to Rs 42. However, this varies from vehicle to model. In such a situation, the industry was expecting a revaluation of the existing 18% tax on lithium-ion batteries. So that the price of electric vehicles can be reduced. The industry has seen a significant growth of 50% in EV sales compared to earlier, with the contribution of electric vehicles in total vehicle (petrol, diesel, electric) sales increasing from 4% to 6.4% last year.
