Gadkari Suggests Removing Subsidies As People Opting For EVs And CNG

Union Minister Nitin Gadkari on Thursday said that there was no longer any need for subsidies for electric vehicles, as consumers were themselves choosing EVs or CNG vehicles.

Speaking at the BNEF Summit, he noted that while the initial manufacturing cost of EVs was high, increased demand has led to reduced production costs, making further subsidies unnecessary.

"Consumers are now choosing electric and compressed natural gas vehicles on their own and I do not think we need to provide much subsidy for electric vehicles," the road transport and highways minister said.

Gadkari added, "In my opinion, the manufacturing of electric vehicles no longer requires government subsidies."

He also pointed out that GST on electric vehicles is lower compared to that of petrol and diesel vehicles. At present, 28% GST is levied on vehicles powered by internal combustion engines, including hybrids, while for electric vehicles it is only 5%.

"The ask for subsidies isn't justified anymore," he added.

On Wednesday, Union Heavy Industries Minister H D Kumaraswamy had said the government is expected to finalise the third phase of its flagship electric mobility adoption scheme FAME in a month or two.

He said that an inter-ministerial group is working on the inputs received for the scheme, and efforts are being made to address the issues in the first two phases of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle scheme.

FAME 3 will replace the temporary Electric Mobility Promotion Scheme 2024, which is set to expire in September.

(With Inputs From PTI)