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Government working on Rs 14,000 crore subsidies for electric and hybrid cars

July 07, 2014, 10:32 AM IST by Pratheek Kunder
Government working on Rs 14,000 crore subsidies for electric and hybrid cars

The Government of India is working on a subsidy policy for green vehicles, which when approved, will provide a major boost for electric and hybrid cars in the country. 

The heavy industry ministry has suggested that the maximum subsidy of 35 per cent should be given to pure electric vehicles; while a 25 per cent benefit should be provided to plug-in vehicles that can be driven for at least 15 km at one go. The subsidy for hybrid cars will range between 15 per cent and 25 per cent. 

The subsidy will be a proportion of the difference between the price of a car running on fossil fuel and that of a green vehicle, said a source to Times of India. The government is hoping that the subsidy, which will routed through auto companies  will result in a reduction in prices and will encourage more Indian consumers to shift to green energy. Although the scheme is expected to cost the exchequer Rs 14,000 crore till 2020, savings in fossil fuel usage has been estimated at Rs 60,000 crore over a period of six years.

Currently, only few Indian manufacturers like Mahindra and Toyota are selling green vehicles in India. The Mahindra e2o that was launched last year, failed to attract customers due to its high price tag, except in New Delhi, where the state government already provides subsidy for green vehicles. It’s the same case with the Toyota Camry hybrid that is priced at Rs 33 lakh, Rs 5 lakh more than the petrol version.  As per the source, the entire approval process will take two to three months, but he declined to comment on when the subsidy scheme will be in place.

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