Subsidies blunt innovation, mask reality: Bajaj Auto MD Rajiv Bajaj

Rajiv Bajaj

Bajaj Auto Managing Director Rajiv Bajaj believes that India cannot develop a sustainable future with subsidies in any sector. In an interview with CNBC TV-18, he asserted that subsidies obscure reality and hinder innovation, and therefore, should not be considered a long-term solution for the future of electric vehicles (EVs) in this country.

Bajaj argued that the future of EVs in India must be based on a sound strategy, rather than relying on subsidies.

He believes that subsidies are not a strategy and, instead, disrupt strategic planning. His comments support the Indian government's plans to not extend the FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy scheme beyond March 2024.

He pointed out that certain segments of the population receive unfair advantages through subsidies, and such subsidies can lead to market distortions. As an example, he noted that it is not sustainable for individuals to receive a Rs 2 lakh subsidy on a Rs 20 lakh car.

A parliamentary committee on electric vehicles (EVs) has suggested the government extend benefits under the FAME India scheme by two more years. The panel claims failure to extend the scheme will slow down the pace of EV adoption, The Times of India reported.

FAME scheme was launched by the Centre in 2011 as part of the National Mission on Electric Mobility. The incentive ends in March 2024.