Moneycontrol News
The government is considering increasing tax rates on petrol and diesel cars with the aim to encourage sales of electric vehicles. As per a recent proposal by the Ministry of Finance, it has been advised to impose a marginally higher tax on conventional fuel cars. The ministry believes that the move will help avoid the additional financial burden that the government incurs as it incentivises buyers under FAME scheme, as per a Mint report.
The FAME-India (Faster Adoption and Manufacturing of (hybrid &) Electric vehicles in India) scheme is intended to support development of the hybrid and electric vehicles market and its manufacturing ecosystem to achieve self-sustenance.
The recommendation has been stated in a memorandum issued by the Ministry of Finance to the executive finance committee for phase two of the FAME scheme, adding that it will act as a catalyst for promotion of electric vehicles. The publication has reviewed a copy of the memorandum. Moneycontrol couldn’t independently verify the report.
The ministry recommendation has come after a demand raised by the department of heavy industries for a budgetary requirement of Rs 9,381 crore to run the FAME scheme till 2022-23.
In April, the government had announced extension of phase one of the FAME-India scheme by six months till September-end or till its second phase is approved, whichever is earlier. The phase one of the scheme was initially proposed for two years till March 31, 2017 but was extended twice for six months up to March 31, 2018.
(With inputs from PTI)
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