Short : The guidelines for incentives amounting to Rs 2,000 crore for establishing EV charging stations will be released soon, aiming to boost the development of infrastructure needed to support the growing adoption of electric vehicles across the country.
Detail : Ministry of Heavy Industries to also issue norms for electric car production scheme.
The final guidelines for disbursing Rs 2,000 crore in incentives under the new PM E-DRIVE scheme to support the installation of public electric vehicle (EV) charging stations will be issued within a month, Hanif Qureshi, Additional Secretary at the Ministry of Heavy Industries, said Tuesday.
The ministry will also release detailed guidelines for implementing the scheme to boost domestic production of electric cars, which it had notified in March earlier this year to attract investments from global EV manufacturers, Qureshi said at a Federation of Indian Chambers of Commerce & Industry (FICCI) event.
The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, which was notified in September with an outlay of Rs 10,900 crore over two years, sets aside Rs 2,000 crore for charging infrastructure, twice that of its predecessor the FAME-2 scheme.
Draft guidelines have been circulated
Qureshi said the ministry has done a number of stakeholder consultations and framed draft guidelines on the disbursal of the total quantum of incentives. At the moment, the draft guidelines have been shared with state governments and the ministry is awaiting their feedback.
“Basically, there will be committees formed in each state at the level of the Chief Secretary where the demand for chargers in the state will be aggregated. Each state will also be sending a proposal to the Ministry of Heavy Industries, and then both will be sanctioned,” he said.
He added that incentives will be disbursed depending on parameters like the number of EVs in a city and the vehicular traffic that passes through the highways. “We will be prioritising on the basis of whether a state has an EV policy or not, whether they have some of their own incentives or not. Because we may receive proposals that are in excess of Rs 2,000 crore,” Qureshi said.
The final guidelines will also allocate incentives for upstream infrastructure that will be developed by electricity distribution companies (DISCOMs), as many of them are facing financial challenges.
Qureshi added that the detailed guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), which was notified in March, will also be out within 3-4 weeks. The scheme essentially lowers import duties to 15 per cent from 100 per cent on car models costing over $35,000 if its manufacturer promises to invest $500 million in setting up a local factory.
According to the Ministry of Commerce, the scheme “is designed to attract investments in the e-vehicle space by reputed global EV manufacturers” and seeks to “provide Indian consumers with access to latest technology, boosting the Make in India initiative, strengthening the EV ecosystem by promoting healthy competition among EV players, reducing imports of crude oil and reduce air pollution”.
‘More charging infra will reduce anxiety’
The PM E-DRIVE scheme aims to support approximately 25 lakh electric two-wheelers, 3 lakh electric three-wheelers, and 14,000 electric buses through demand incentives. However, compared to its predecessor the FAME-2 scheme, incentives in the latest subsidy are significantly lesser. They also make a significant omission–electric cars.
“One school of thought believes that no incentive should be given to electric vehicles in the shape of upfront demand subsidy. Rather, there should be taxation benefits and there should be adequate charging infrastructure. If adequate charging is there and people do not have any anxiety, it will make life easier for them and they will buy EVs on their own. And partly, that is what we have adopted in the PM E-DRIVE scheme,” Qureshi said.
“The charging infrastructure outlay was Rs 1,000 crore in the FAME-2 scheme, which was a 5-year scheme. Now, the outlay is Rs 2,000 crore in the PM E-DRIVE scheme, which is only a 2-year scheme. There will be 22,100 chargers for electric four-wheelers. There is a tentative list of top 40 cities and top 50 highways with high-density traffic. Chargers for two- and three-wheelers will be around 48,000 and for buses and trucks, there are about 1,800 chargers, all for high-density corridors,” he added.
‘Reduce GST on charging, batteries to 5%’
At the event, Sulajja Firodia Motwani, CEO of Kinetic Green Energy & Power Solutions Ltd and chairperson of the Electric Vehicle Committee at FICCI, said that GST on replacement batteries and charging services needs to be reduced to 5 per cent from the current 18 per cent. “This will make charging more affordable for our consumers and it will make batteries more affordable for replacement. It will also help the OEMs to reduce the fund blockage due to the inverted duty structure,” Motwani said.
She also highlighted that incentives under the PM E-DRIVE scheme are beginning to run out. “We do believe that the allocations under the scheme are already beginning to exhaust themselves. (For) three-wheelers, we have already run out of money and that just means that the scheme has been very well received. We would like to urge MHI to look at an extension of the scheme and to allocate higher budgets towards this green dream,” Motwani said.
In response, Tarun Kapoor, Advisor to Prime Minister, said, “(For) three wheelers, we’ve run out of subsidies, so that I think is a success, it’s not a failure. But the subsidy was restored yesterday, so it’s not that we’ve run out of money. It’s just that the sanction was for a particular number in the first year and we did that in a few months”.
