Finance Minister Nirmala Sitharaman will introduce the Union Budget 2024 on 23 July 2024. Under this budget, she will be targeting different segments of growth. However, the EV industry is the one that needs the most support from the union budget 2024 this time. Thus, the government can introduce Faster Adoption And Manufacturing of Hybrid and Electric Vehicles in India (FAME III). There are already FAME I and FAME II completed. Will the FAME III help revive the falling EV industry’s demand in India?
Why India’s EV Industry Needs FAME III?
India’s EV needs FAME III. It will help provide India with funds to meet its infrastructural needs. How will FAME III help in revolutionising the EV Industry? The foremost thing will be the development of charging infrastructure. If there is charging infrastructure available, then there will be more usage of EVs. The EV drivers will be able to charge their vehicles easily from these charging points. Apart from that, it will help in localising components.
There would be resources to manufacture more components in India. It will provide employment and also help in increasing the exports from India to other countries. However, these two points will perform even better if the government helps in reducing the GST rates on EV components. The current rate of GST is 18% on the components of electric vehicles. However, it will reduce to 5%.
The tax rationalisation will help a lot in the EV industry’s growth. 2023 had an increasing demand for EV vehicles. However, it is currently falling. The demand for EV two-wheeler vehicles is falling by 27%. Apart from that, OLA Electric’s founder shares his opinions about increasing the focus on the supply chain rather than cute ads. The major issue is that EV needs to provide the same facilities as petrol vehicles.
This can happen only by investing in the infrastructure. The petrol pumps are available 24*7 everywhere. Thus, petrol and diesel vehicles don’t have much difficulty while travelling. However, the EVs need to be charged and do not have charging stations available at every point. It increases the difficulty of expanding the electric vehicle’s space. The EV companies are manufacturing EVs that can cover long distances after a single charge. However, there is still a need for charging stations around the country.
Also, these stations needs to be build as soon as possible. The country plans to go 100% electric by 2030. However, it won’t be possible without tax rationalisation and incentives. Stay tuned for more information.