Budget 2019 : Electric Vehicles

The Union Budget 2019 has laid a clear road-map for the mobility on Indian roads in the future. It is evident that the Indian Government wants more electric vehicles on the Indian Roads.

What steps are being taken for Buyers?

  • Imported and assembled cars are have been made more expensive due to the heightened customs duty on them and their individual components.
  • Petrol and Diesel prices have been increased, making it dearer for drivers to operate them.
  • The FAME-II policy has also been approved and its implementation has begun. FAME-II will help in the growth of EV-driven public transport and this will provide some impetus to further develop the infrastructure needed to support Electronic Vehicles.
  • The government plans to spend Rs 10,000 crore in the next 3 years and over a Rs 100 lakh crore altogether to develop infrastructure for the EVs.
  • To make the EVs cheaper and affordable for all, the government has proposed a drop in the GST rates from 12% to five %.
  • Last year, the government had reduced the EV’s GST from 18% to 12%.
  • The government aims to provide up to Rs 1.5 lakh additional income tax deduction on the loans taken to buy electric vehicles.

What steps are being taken for manufacturers?

  • EV manufacturers will be eligible for deductions in capital expenditure under Section 35AD (1) of the Income Tax Act.
  • The customs duty on lithium-ion cells has been reduced to zero to encourage domestic battery production.

What is FAME?

FAME is the Indian Government’s ambitious Faster Adoption and Manufacturing of Electric Vehicles in India (FAME India) program. The FAME scheme aims to put greater emphasis on providing affordable and environmentally friendly public transportation options for the masses. For this, the scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in e-3W, e-4W and e-bus segments.



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