Govt dangles carrot for green cars after stick for clunkers

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Apr 09, 2015 10:15 IST

In the biggest ever push towards propagation of hybrid and battery operated vehicles in India, the government on Wednesday formally launched a scheme that provides direct subsidies to the consumer for buying such vehicles ranging from Rs. 1,800-29,000 for two wheelers and Rs. 13,000-1.38 lakh for cars.

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A corpus of Rs. 795 crore has been set aside for the scheme — Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) — to be implemented over a 2-year period in 2015-16 and 2016-17. A bulk of it (Rs. 500 crore) would be spent on demand incentives where the consumer would be charged less depending on the type of vehicle being bought, with the manufacturer getting reimbursed by the government.

The scheme also covers hybrid and electric three wheelers, light commercial vehicles and buses where the incentive offered ranges from Rs. 3,300-61,000, Rs. 17,000-1.87 lakh and Rs. 34-66 lakh respectively.

India has been a laggard in adopting and promoting hybrid and electric vehicles, but the scheme, effective April 1, is expected to catalyse development of alternate fuel technologies in the country.

The scheme is applicable only for vehicles assembled in India, not on imports.

Currently a host of organised two-wheeler manufacturers such as Hero Electric, Electrotherm, Avon cycles and Lohia Auto manufacture electric two-wheelers in India. Mahindra makes the e20 electric car, and Toyota the hybrid Camry, on which the subsidy will be about Rs. 58,000.

The government said Tata Motors is expected to launch two products in future while Maruti has promised to bring in the Swift ‘range extender’, a hybrid technology.

“We are starting the scheme in metropolises. Eventually the scheme will be launched in Smart Cities and all major cities across the country,” said Anant Geete, minister for heavy industries and public enterprises. “Keeping in view the limited domestic reserves of conventional fuels and the rising demand for automobiles, it is a dire necessity to find alternative sources of energy for transport which are eco-friendly yet costeffective.”

The government has set a long-term target of 6-7 million electric vehicle sales by 2020. It would decrease carbon dioxide emission by 24 million tonnes and result in fuel saving of an estimated 9,500 million litres (valued at Rs. 60,000 crore). Besides, the development of new technology would also lead to the creation of about 300,000 jobs.

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