Union Budget 2024 – Recent Updates

July 22, 2024

India’s electric vehicle (EV) industry is going to be affected by the Union Budget 2024 in a big way. It is the goal of the Narendra Modi government for 30% of all cars sold by 2030 to be electric. This goal will probably be helped by more money in the budget for growth and the spread of subsidy programs.

Government Initiatives

Experts think that the government will take a number of actions, such as allocating around 10 billion rupees to the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) strategy, which is very important for the growth of electric vehicles. Plans have been sent by the Ministry of Heavy Industry to the Prime Minister’s Office. Final choices will be made closer to the budget date.

Extending FAME Policy

Stakeholders in the industry want a clearer outline of the FAME-III policy in the budget. However, recent comments suggest that policy details might not be released right away. The government is thinking about putting more money into the Union Budget to encourage people to buy electric vehicles more quickly.

Incentives for EV Adoption

Stakeholders say that to encourage people to buy electric vehicles, capital spending should be subsidized, machinery should have higher depreciation rates, and GST on EVs and their parts should be streamlined. In FY24, sales of electric passenger cars tripled, up 91% year-over-year to 90,996 units. Sales of electric commercial vehicles also tripled. But there are still big problems, especially with the charging system.

Industry Stakeholder Expectations

Tata Motors, a major player in India’s electric vehicle (EV) market, thinks that the industry will be able to become self-sufficient with continued government backing. This includes keeping rules that help people in place until a certain number of EVs are on the road. When it comes to making EV batteries, India is not as far ahead as China. To build a strong domestic battery manufacturing capacity, policymakers must continue to back the industry and work with foreign companies.

About FAME policy

Introduction and Goals: The Faster Adoption and Manufacturing of Electric Vehicles (FAME) initiative, launched by the Indian government in 2019, aims to promote electric and hybrid vehicles. The primary objectives are to reduce the cost of electric vehicles, improve local manufacturing, and expand the charging infrastructure across the country.

Environmental and Energy Impact: FAME seeks to significantly reduce pollution and decrease India’s dependence on fossil fuels. By encouraging the use of electric vehicles, the policy aims to create a cleaner environment and a more sustainable energy future.

Phases and Incentives: The initiative is structured in two phases, FAME I and FAME II. It offers incentives for electric two-wheelers, three-wheelers, and buses. Additionally, FAME supports research in battery technology and the integration of renewable energy into transportation systems.

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