Government proposes tax cuts for cleaner vehicles

The government is reportedly planning to increase the popularity of electric, alternative fuel-powered and hybrid vehicles.

Developing nations like India are caught in between the need to grow financially fast and being environmentally responsible at the same time. The huge growth curve has meant that more and more vehicles are being added to our roads at an accelerated pace, and so are the amount of pollutants that are released by these vehicles. The Government of India wants to promote cleaner
vehicles, as stopping people from buying vehicles will not work until and unless the infrastructure and public transport improves by leaps.

The government is reportedly planning to increase the popularity of electric, alternative fuel-powered and hybrid vehicles by reducing the excise duty taxes levied on such vehicles. Currently, personal transport and public transport vehicles incur the same excise taxes as other vehicles in their respective categories. The plan is to reduce the excise duties on electric and alternative fuel-powered vehicles to zero and reduce the same to 2 per cent on hybrid vehicles. These proposals could be implemented in the next union budget, which will be announced in July 2015.

The above proposal, if implemented will not only help reduce the harmful pollution levels around the country, but also help reduce the huge fuel bill that our country incurs every year importing crude oil. There is also talk of promoting vehicle manufacturers to produce greener vehicles in India itself, as part of the new government’s ‘make in India’ policy.