Budget 2023: Cheaper EVs as FM Sitharaman extends subsidy on electric batteries

Under the seven priorities of Budget 2023 - ‘Saptarishi’ - green growth is one sector which will be encouraged.

By removing the custom duty on capital goods/machinery for manufacture of lithium-ion cell in batteries of electric vehicles (EV) and extending the subsidy on electric batteries for one more year, finance minister Nirmala Sitharaman gave a significant push for EVs by making it cheaper. She announced in her Budget speech at the Parliament on Wednesday that the concessional duty on lithium-ion cells for batteries will continue for another year.

FM Sitharaman announced that the concessional duty on lithium-ion cells for batteries will continue for another year. (File)

“To provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles," Sitharaman added.

Under the seven priorities of Budget 2023 - ‘Saptarishi’ - green growth is one sector which will be encouraged through policies accelerating clean energy and reducing carbon footprint. The other segments in focus are: inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, youth power, and the financial sector.

In a Mint report, experts from the EV sector had said that they expected regulations to cut carbon emissions and promote carbon credits to provide a fillip to the manufacturing and adoption of electric vehicles.

The finance minister also announced Mahila Samman Bachat Patra- a one-time new small savings scheme – for a two-year period up to March 2025. This initiative will avail a deposit facility for a woman up to ₹two lakh for two-year period at a fixed interest rate of 7.5% with partial withdrawal option.

Sitharaman’s fifth Budget and the Narendra Modi-led government's last full-fledged Budget before the 2024 general elections, was presented in digital format again. The FM acknowledged that it was Amrit Kaal’s first budget and said, "In 75th year of Independence, world has recognised India as a bright star".