Finance Minister Nirmala Sitharaman today announced the Union Budget 2019, with a lot of emphasis on improving India’s transportation system. One of the focus of this year’s budget was Green Mobility, with a lot of push towards Electric Vehicles. Describing the Union Budget as development friendly and future oriented, Prime Minister Narendra Modi said it is a "green budget" which focuses on the environment and pitches for green and clean energy and transportation needs.
Nirmala Sitharaman earlier announced the reduction of GST on electric vehicles from 12% to 5% and said that to make EVs affordable for consumers, government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs. Sitharaman also said the government has already approved Rs 10,000 crore for FAME II scheme on April 1, 2019 to encourage faster adoption of electric vehicles by providing right incentives and charging infrastructure.
Here’s how the Electric Vehicle industry reacted to the announcement-
Rahul Sharma, Founder, Revolt Intellicorp Pvt. Ltd.
“This budget has been very promising for our industry. The proposal to lower GST rates on electric vehicle from 12% to 5% is a positive sign and we hope to see it implemented at the earliest. The budget is an opportunity for consumers to start adopting electric vehicles. An additional income tax deduction of 1.5 lakh on the interest paid on the loans would make the purchase more affordable. This is the start of a revolution and we believe 3 years from now things will change rapidly and India will be ahead of the curve in its adoption rate.”
Ram Venkataramani, President, ACMA
“The Budget unveiled by Hon’ble Finance Minister is indeed futuristic and lays the foundation for India becoming a global economic powerhouse in the next few years. We are glad that the Government envisions making India a global hub for manufacturing of EVs. Reduction of GST from 12 per cent to 5 per cent and additional Income Tax deduction of rupees 1.5 lakh on interest paid on loans for purchase of EVs are steps in the right direction to make EVs affordable. Further, focus on mega manufacturing projects for semiconductors, photo-voltaic cells, Li-ion battery, etc. will facilitate localization and spur manufacturing of EV components in India.”
Naga Satyam, Executive Director, Olectra Greentech
“It’s more than what the EV industry has been expecting. There were doubts in the minds of investors about the intentions of the Government in terms of the EV industry. But the announcements made in the current year’s budget must have definitely quelled their doubts. Also, with this budget Government has made it amply clear that EV manufacturing is the next big thing in its vision. Now, it is the responsibility of the industry to rise to the expectations of the Government and work towards more localization.”
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV)
“The announcements on Electric Vehicles (EVs) in the union budget 2019-2020 bring cheers to both consumers as well as e-vehicle manufacturers. To make India as an EV manufacturing hub, decision on incentivizing EV manufacturing by extending benefits under Section 35AD(1) is a move in the right direction. It will help in the creation of a local manufacturing base and encourage component manufacturers to invest in the sector. Additionally, bringing down custom duty on lithium-ion cells to nil would further cut down the cost of batteries and help local battery manufacturers to scale-up the business.
Jeetender Sharma, Founder & Managing Director, Okinawa Autotech Pvt. Ltd.
“The Union Budget 2019-20 is very progressive and growth-oriented. Hon'ble Finance Minister’s emphasis on FAME II initiative and pushing EV infrastructure will help in attracting investment for local manufacture of components which will further strengthen Make In India initiative and ensure clean and green energy over time. The Government’s mission to bring e-mobility revolution to India by 2030 is a truly commendable and will provide the much needed impetus to the industry. As the government gears up for clean and green mobility, we are hopeful that India will emerge as one of the leading manufacturing hubs for electric vehicles.”
Parveen Kharb, CEO and Co-Founder, 22KYMCO
“The budget announced by the Finance Minister for 2019-20 will catalyse India’s journey to electrification and will be beneficial for both, the e-mobility industry as well as consumers who are looking to make the shift to electric vehicles. The budget has a strong synergy with the FAME – II scheme and the announcement will generate a positive sentiment. Lowering GST rates on electric vehicles to 5% will make EVs more attractive to the buyer in the future. In addition, incentives on income tax will also increase the momentum for the sector. We welcome the new budget and trust that this will encourage faster adoption of e-mobility in India.”
Ashish Harsharaj Kale, President, Federation of Automobile Dealers Associations ( FADA )
"Our budget expectations were high, looking at the Current State of the Industry as we were expecting specific measures in the budget to revive Growth in the Auto Industry and to that extent we are disappointed. Moreover, with an addition of cess on Petrol and Diesel leading to price hike by 1 rupee might impact Auto sales, especially in the Price sensitive 2wheeler segment.
F A D A Welcomes the Overall Positive and Inclusiveness of the budget and We hope that the measures taken will ensure a buoyant Economy at the earliest, resulting in Overall Higher Growth and as a result Growth in Auto Retails too."
Sulajja Firodia Motwani, Founder and CEO of Kinetic Green and Vice Chairperson, Kinetic Group
“The Budget 2019 announced by Hon’ble Finance Minister today is extremely positive for the Electric Vehicle sector, and re-affirms the Indian Government’s commitment to rapid electrification of India’s automobile sector. FM has announced approval and adoption of FAME II; Government’s detailed policy to incentivize and support accelerated adoption of EVs; with an outlay of whopping Rs. 10,000 crores for next 3 years. This removes all ambiguity surrounding the long term EV Policy and I am confident that this move will encourage manufacturers to enhance investments in this sector and customers to purchase move EVs."
Mr. Naveen Munjal, Managing Director of Hero Electric
“The electric vehicle industry needed a substantial boost & support from the government and we welcome the government’s recommendation of reduction of GST on EVs from 12% to 5%. In addition to this, income tax reduction of up to Rs 1.5 lakh on the interest paid on EV loans is an extremely positive move which will encourage customers to make a switch from ICE vehicles to EVs. Reduction in custom duty on lithium-ion cells would help local component manufacturers in scaling up the production thereby further reducing the overall upfront cost of electric vehicles in India. We are confident that such directives will boost up the rate of EV adoption in the country and will act as a catalyst in the government’s aim of faster adoption of electric vehicles and higher level of localization under the ‘Make In India’ initiative.”
Nishant Arya, Executive Director, JBM Group
“We welcome the measures announced in the budget aimed towards promoting and faster deployment of EVs. The reduction of GST on EV's from 12% to 5%, exemption in customs duty on EV parts and additional income tax reduction of Rs 1.5 lakh on the interest paid on the loan to purchase these vehicles is a big push to make EVs affordable for the consumers. Additionally, the government’s approval of Rs 10,000 crore for the FAME II scheme in April this year is in line with their aim to make India the manufacturing hub for EVs and will be a great booster for the industry", said Mr. Nishant Arya, Executive Director, JBM Group.
Vineet J Mehra, Managing Director, DOT
“Reduction in GST on EVs as well as tax rebate on interest for purchasing EVs should give the requisite demand push to the Electric Vehicle sector, however specific financial option for purchase of EVs by aggregators and E-logistics players still not addressed in the budget.”