Government of India is planning to implement subsidy offer on purchase of EV vehicles, with the announcement of a scheme of Rs 14,000-crore to promote green vehicle drive, reported Times of India.
A surcharge of Rs 2 on petrol and green cess on vehicles at the rate of four percent of annual insured value has also been recommended by the government panel as a part of the green vehicle promotion. A levy of 7.5 percent transport tax for new petrol cars and 20 percent for diesel cars has been suggested.
Officials dealing with the scheme stated that the amount of subsidy will be a ratio of the difference between the price of a car using conventional fuel and that of a green vehicle.
India has witnessed less intake of hybrid EV vehicles like Toyota Prius, Scorpio, Toyota Camry and Mahindra e2o.
The clearance proposal initiated by Heavy Industry Ministry and forwarded to Finance Ministry, suggests that a subsidy of 35 percent will be given to pure electric vehicles and a 25 percent can be accounted for plug-in vehicles having a minimum running efficiency of 15 km at one go. All mild hybrid motors can make avail of a 15 percent subsidy and a 25 percent for the stronger edition.
Prices will go down, if the subsidy is directed through auto companies encouraging Indian buyers to adopt more green vehicles. The scheme will cost the exchequer Rs 14,000 crore till 2020, but the regular fuel savings will be around Rs 60,000 crore in six years, reported the news agency.
The Heavy Industry Ministry has proposed a 100-day work scheme, details of which are delivered to the Prime Minister. The whole process including cabinet approval will take some time and it is impossible to predict the exact launching time of the subsidy scheme, added the report.
In another green vehicle initiative in India recently, Uttar Pradesh, a northern Indian state, announced that all vehicles over fifteen years  will have to pay green tax. The government has made consent to implement the amendment in the UP Motor Vehicle Act with immediate effect. Non-transport and private vehicles should pay ten percent of the due tax along with green tax during renewal of registration.