If you have always wanted to buy an electric or hybrid car, buying it after the Union Budget could be a good time with prices of these vehicles set to drop if the government pushes for subsidies as is strongly expected.
The government is reportedly all set to introduce 35 percent subsidies for electric cars in the Union Budget for this fiscal year, a step never taken by any previous government, most likely due to pressure from the petrol car lobby. Petrol cars are priced lower than their electric counterparts, and through this move, the government is also looking to see a shift among consumers from petrol to green energy.
A source from a leading car manufacturer told International Business Times India Edition that the government has already readied 35 percent subsidies for electric cars, such as Reva and Mahindra e2o.
The Economic Times had reported on Monday that the government was set to announce a ₹14,000-crore scheme to push electric and hybrid vehicles. The heavy industry ministry had suggested in its proposal to the Finance Ministry that pure electric vehicles be given a maximum subsidy of 35 percent, while plug-in vehicles should get a benefit of 25 percent. With the government's expected decision on subsidies, a mild hybrid vehicle will get you a 15 percent subsidy.
The hybrid vehicles currently available in the country include the Scorpio from Mahindra and Mahindra as well as the Toyota Camry and the Toyota Prius. According to the report, if the proposal is accepted, the Toyota Camry, which is priced at ₹33 lakh in Delhi will get a subsidy of around ₹1 lakh.
If the government goes ahead with its decision, India will join the club of countries such as the United Kingdom, Germany and China where the government has introduced sops such as tax benefits and subsidies for electric vehicles.
A similar subsidy was reported to have been considered by some previous governments, but it could not make it through given the strong lobby of petrol car manufacturers. This time, however, the proposal for subsidies on electric cars has reached the expenditure secretary who heads the expenditure finance committee, ET reported.
While the subsidy scheme would dent the government treasury by ₹14,000 crore, the government is expected to save enormously on fossil fuel, with an official telling ET that the savings is estimated at ₹60,000 crore in six years.
The current stock market share price of electric car maker Mahindra and Mahindra at 11:37 am on 8 July is around ₹1,222 on the Bombay Stock Exchange.