Govt to scrap registration fees for buying electric vehicles: Javadekar

Around Rs 500 crore will be used to set up 2,636 charging stations in 62 cities across cities, minister tells Parliament.

The government is promoting electric vehicles (EV) by proposing to drop registration fees and using the Union Budget to given an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase such transport, said Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, has said.

Javadekar said his department will spend around Rs 500 crore to set up 2,636 charging stations in 62 cities across cities under the second phase of the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME) scheme. People have purchased about 11,000 EV in the last 10 months by using FAME-II, he said in Rajya Sabha on Tuesday.

As many as 5,595 electrical buses have been sanctioned to various cities for public transport under the second phase of the scheme, which was launched in April 2015. During the first phase, around 2.8 lakh hybrid and electric vehicles were supported by way of demand incentive amounting to about Rs 359 crore.

FAME-II, which started in April 2019, has a total budgetary support of Rs 10,000 crore for a period of three years to support electrification of public and shared transport by providing subsidies to around 7,000 buses, 5 lakh three-wheelers, 550,00 passenger cars and 10 lakh two-wheelers.

Javadekar said Goods and Services Tax (GST) on electric vehicles was reduced from 12 per cent rate to 5 per cent, as against the 28 per cent GST levied on conventional vehicles.

Javadekar rejected claims that the automobile industry was battling slowdown because of government regulations, saying norms were needed for safety, fuel economy and the environment. "The government, as a policymaker, always attempts to keep and improve momentum of the economy through a package of measure through stakeholder consultations for comprehensive and continued development of the auto sector as and when required. Some of the steps taken by the government to counter automotive slowdown," he said.