Odisha caps official EV costs, weighs centralised vehicle management policy

The state has fixed procurement ceilings for official electric vehicles and is considering a centralised system to manage contractual vehicles and accelerate fleet electrification

As Odisha tightens its transition to electric mobility by mandating that all new official vehicles procured from June 1 must be electric vehicles (EVs), the state government has capped procurement costs of these electric cars based on the rank of government functionaries.

 

In an office memorandum issued by the Finance Department, the maximum procurement cost of EVs has been fixed at ₹30 lakh for the Governor, Chief Minister, Chief Justice, High Court judges and ministers. For the Chief Secretary, Development Commissioner, Agriculture Production Commissioner, additional chief secretaries, principal secretaries, commissioner-cum-secretaries and officers of equivalent rank, the ceiling has been fixed at ₹25 lakh.

 

Similarly, district collectors, superintendents of police and district judges will be entitled to vehicles costing up to ₹20 lakh. The prices are exclusive of taxes and statutory dues. Procurement of EVs has been made mandatory for official use across departments, public sector undertakings, institutions, universities and societies under the state government.

 

The move, aimed at reducing fuel expenditure, improving energy security and accelerating the state's clean mobility agenda, comes as the state prepares to phase out thousands of ageing government vehicles and overhaul the management of its official transport system.

 

The Finance Department has stipulated that procurement of EVs can only be undertaken after obtaining prior concurrence from the department. New vehicles will be purchased only after the existing vehicles complete their prescribed lifespan and are condemned or scrapped.

 

"The EVs manufactured by Tata Motors, Mahindra and Maruti Suzuki will be eligible for procurement. The 'one-officer, one-vehicle' principle will be strictly adhered to while procuring EVs to curb excess deployment of official vehicles," the memorandum stated.

 

While the order makes EV procurement the norm, the purchase of petrol or diesel vehicles will be permitted only under exceptional circumstances from June 1 onwards. The decision was taken in view of prevailing fuel and energy challenges arising out of the West Asia crisis and the increasing burden of fuel expenditure.

 

The decision assumes significance as Odisha is undertaking a large-scale replacement of its ageing government fleet. Official estimates indicate that the state has 6,241 government vehicles that are more than 15 years old and are slated for scrapping under the vehicle scrappage policy. The mandatory EV procurement policy is expected to ensure that a substantial portion of the replacement fleet shifts to electric mobility over the coming years.

 

The move is part of a broader effort by the state government to reform official vehicle management and improve efficiency. A proposal prepared by the Centre for Modernising Government Initiative (CMGI) has also recommended the formulation of an Odisha Centralised Contractual Vehicle Management Policy (OCCVMP), under which a Centralised Vehicle Procurement Cell (CVPC) would handle the hiring of contractual vehicles for all departments.

 

According to the proposal, reviewed by Business Standard, Odisha currently has more than 40 government departments that independently procure contractual vehicles, resulting in higher costs, duplication of effort, procurement anomalies and weak accountability. It argues that a centralised procurement mechanism would enable economies of scale, reduce corruption risks and improve transparency in vehicle deployment.

 

Envisaging rapid electrification of the state's contractual vehicle fleet, the CMGI recommends that at least 50 per cent of all contractual vehicles hired by the government should be EVs initially, with the share increasing by 25 percentage points every year. If implemented, the proposal would make Odisha's contractual government fleet 100 per cent electric by 2029, it said.

 

The proposal, sent by Governance Advisor Chaudhuri Amit Kabi to Chief Secretary Anu Garg, also calls for deployment of a GPS-based digital monitoring platform, "e-Odisha Vahana Tracker", under which every contractual vehicle would be fitted with tamper-proof GPS devices. The application would provide real-time tracking, route history, fuel consumption data and automated digital logbooks, while integrating with the Finance Department for app-verified vendor payments.

 

"The centralised procurement and digital monitoring could reduce expenditure on contractual vehicles by 15-20 per cent through bulk procurement and better oversight. The system is also expected to eliminate misuse of official vehicles and improve administrative efficiency by allowing departments to focus on core governance functions rather than vehicle management," added the proposal.