"Feebate" to promote Electric Vehicles in India

Feebate – Electric Cars India

Feebate (Fee and rebate) is a model where charges and rebates are levied to promote environment-friendly practices. Recently Niti Aayog, the government think tank floated the idea of adopting the feebate structure to encourage electric vehicles in India. As per this system, charges will be levied on polluting vehicles and a reward will be offered to the lesser polluting ones.

As per them, a feebate system will promote large-scale manufacturing and sales of EVs in India. This policy is already in place in countries like Austria, Denmark, Netherlands, France, Canada and Singapore. NITI Aayog is planning to collect funds through Feebate and use it as a subsidy for the EVs. Niti Aayog is still seeking a response from all ministries, in this regard.

Also, read 10 Biggest And Best Electric Vehicles Advantages

Internal combustion engine vehicles are subject to 28% GST (goes up to 33% with surcharge), while EVs attract only 12%. Others are skeptical about the future of EVs in India with no firm infrastructure or long-term policies still in place to support the same. All the European countries mentioned in the report by Niti Aayog already had an established electric vehicle ecosystem. Another concern pointed out in the adoption of Feebate system (to promote EVs in India) is the fact that most of the components used to make an electric vehicle would be imported from China. Hence, a feebate system would support Make in China rather than promoting Make in India.

With the BSVI to be implemented by April 2020, prices of diesel cars are expected to increase. Will a carbon-based tax be more effective in India? A Feebate system sounds like more of an imposition on the Indian customers. Let me know what you think by leaving your comments below.