The upcoming Union Budget 2024 is anticipated to outline a comprehensive roadmap to accelerate India's electric vehicle (EV) ambitions, with the Modi government targeting 30% of auto sales to be electric by 2030. Experts predict that the government will allocate a higher budget for EV expansion and extend related subsidy schemes to achieve this goal.
India's EV push has been significantly supported by the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) policy, which covers electric two-wheelers, three-wheelers, and four-wheelers. Sources familiar with the deliberations suggest that the FAME policy could receive a budgetary allocation of around Rs 10,000 crore. The Ministry of Heavy Industry, which administers this scheme, has submitted a plan to the Prime Minister's Office for approval. A final decision on the proposal will be made closer to the budget announcement, taking into account the fiscal situation.
Industry insiders had expected Finance Minister Nirmala Sitharaman to discuss the FAME-III policy on July 23. However, Union Minister HD Kumaraswamy indicated that the policy formulation is in its final stages and may not be included in the Budget announcement. Instead, the new coalition government is considering allocating a larger fund for the rapid adoption of EVs in the main budget set for July 2024.
Recently, stakeholders from the EV industry and the Ministry of Heavy Industries proposed extending the EV subsidy scheme, focusing on public electric transportation and expanding charging station infrastructure. Ahead of the Budget 2024-25, stakeholders and experts have advocated for incentivizing capital expenditure on EVs, increasing depreciation rates on plant and machinery, and rationalizing GST rates on EVs and their components.
Shradha Suri Marwah, ACMA President and CMD of Subros expressed optimism about a growth-oriented budget, emphasizing the continued support for reforms and infrastructure development. She highlighted the importance of schemes like the Production Linked Incentive (PLI), which have been beneficial to the automotive industry, and expressed hope for the continuation of such measures.
Despite being in the early stages of developing its EV infrastructure, India has seen positive responses toward electric vehicles, suggesting a promising future for the sector.