The Green tax to be imposed on the fossil fuel cars mainly aims to offer incentives to EV buyers and boost the overall EV sales
The government of India, reportedly, is planning to impose a green tax on petrol and diesel cars to boost the adoption of electric vehicles (EV) in India. It is planning to utilise the tax to provide subsidies on the purchase of electric cars. It is in talks to lower down its financial implications coming out of subsidising EV buyers.
If the green tax is implemented, the government will be able to generate more than 5 times of the current subsidy provided as per Moneycontrol reports.
Incentives for e-vehicles
The government has provided incentives worth Rs. 305 crores to around 2.6 lakh EVs. The incentives for e-vehicles from e-scooters to hybrid buses range between Rs. 7,000-1 crore. It, reportedly, has saved around 37 million litres of fossil fuel.
A government official said that imposing Rs. 2,000-3,000 on a car or Rs. 200-300 on a two-wheeler would not put any significant burden on the buyers but would add to the government coffer.
Earlier in May, the government introduced an incentive of Rs. 2.5 lakh for EV buyers as part of a package for electric and hybrid engines worth Rs. 9,400 crores. The package was divided to allocate in 5 years, of which, Rs. 1,500 crores were mainly for passenger vehicles and two-wheelers.
EV sales in India
In India, the passenger vehicle and two-wheeler markets are pegged at 3.5 million and 22 million units respectively. The plan to impose the green tax is mainly to boost EV sales across the country. In 2017-18 EV sales stood at around 56,000 units as against about 25,000 units in 2016-17.
The government has been promoting EV adoption for a cleaner environment under Faster scheme Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) scheme.
