Union Budget envisions India as a global hub for manufacturing electric vehicles

The Union Budget has outlined various proposals for giving a boost to manufacturing of electric vehicles and developing India as a global hub for the same.

In her maiden budget speech in Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman said that Under Phase-II of the FAME Scheme, only advanced battery and registered e-vehicles will be incentivized, with greater emphasis on providing affordable  and environment friendly public transportation options for the common man. The main objective of the Scheme is to encourage faster adoption of electric vehicles through upfront incentive on purchase of such  vehicles and also by establishing the necessary charging infrastructure for the same. Phase II of FAME has an outlay of  Rs10,000 crore for a period of 3 years, and has commenced from 1st April, 2019.

The Finance Minister has further said that  the  inclusion of solar storage batteries and charging infrastructure in the FAME scheme will give a boost to manufacturing, which is needed for India  to leapfrog and become a global hub for  manufacturing of these vehicles.

The Finance Minister also said that the  Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%.  Also to make electric vehicles affordable to consumers, the Union Budget says the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.  This  amounts to a benefit of around Rs 2.5 lakh over the  loan period to the taxpayers who  take loans to purchase electric vehicle.

To further incentivise e-mobility, customs duty is being exempted on certain parts of electric vehicles.

Two mega initiatives of UjjwalaYojana and SaubhagyaYojana– have transformed the lives of women in every rural family and dramatically improved their ease of living. This was stated by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in  Parliament today.

Household access to clean cooking gas has seen an unprecedented expansion, through provision of more than 7 crore LPG connections. All villages, and almost 100% households across the country have been provided with electricity. A combination of efficient implementation and enthusiastic adoption has significantly improved access to energy for rural households, the Finance Minister added.

By 2022, the 75^th year of India’s independence, every rural family, except those who are unwilling to take the connection will have an electricity and a clean cooking facility, informed Finance Minister..

The Government has supported and encouraged women entrepreneurship through various schemes such as MUDRA, Stand up India and the Self Help Group (SHG) movement. In order to further encourage women enterprise, the budget has a proposal to expand the Women SHG interest subvention programme to all districts.  Every verified woman SHG member having a Jan Dhan Bank Account will be allowed an overdraft of Rs.5,000.  One woman in every SHG will also be eligible for a loan of up to Rs. 1 lakh under the MUDRA Scheme.  Seventy per cent of beneficiaries under MUDRA scheme are women.

There is a proposal to increase budgetary allocation for ICDS to Rs.27,584 crore in 2019-20 from Rs.23,357 crore in 2018-19.

The maiden budget presented by Finance Minister Shrimati Nirmala Sitharaman has struck key chords with the Indian populace and chartered ambitious initiatives and plans for New India’s promising future.

This budget was drawn keeping in mind the needs of the upcoming generations and not the upcoming elections. With its mantra being “transform, reform, and perform”, this budget signifies a well-intentioned departure from a “token approach” to a “total approach”.

The Union Budget 2019 focused on developing the ease of living for the common citizen of India, with developmental initiatives proposed for rural India, railways, connectivity, introducing unified digital payments, inland waterways, taxation, education, and financial sectors.

With its focus on strengthening “Gaon, Garib, aur Kisan”, the budget aspires to provide running water, electricity, gas connection, and clean toilets to every rural household by 2022 through initiatives like “Har Ghar Jal” and Swachh Bharat Abhiyaan, with proposals for the latter to tackle solid waste management in cities too.

Instead of being written off as yet another woman-empowering budget, it focuses on developing a women-led economy through multiple initiatives. By chanting “Nari tu Narayani”, the FM introduced Rs 1 Lakh loan under mudra scheme for women entrepreneurs and Rs. 5,000 overdraft for every verified SHG member having a Jan Dhan account.

The budget also highlighted India’s aspiration to be a major space power through initiatives like the Gaganyaan, Chandrayaan and introduced New Space India Limited (NSIL), a new commercial arm for research and development carried out by ISRO.

Connectivity was another issue touched upon by the budget with the introduction of Sagar Mala and Bharat Mala, initiatives that will boost India’s infrastructure further. The budget also pushed for the concept of “One Nation One Grid”, and also introduced various incentives to boost sales of e-vehicles. The budget also proposed to increase the cargo carrying capacity of the Ganga by four times.

The budget called attention to the successful execution of PM Gram Sadak Yojna, which is just 3 per cent short of fulfilling its 2022 target. Also, it highlighted cost savings of around Rs. 18,341 crores through the distribution of 35 crores LED bulbs leading to an energy efficient new India.

The FM congratulated honest tax paying citizens of India for the increase of 78% in the direct tax revenue over the last five years. It also highlighted the reduction of NPAs in public sector banks by 1 lakh crore and recovery of over 4 lakh crores through stringent banking laws like IBC etc.

In 2013-14, India was the 11th largest economy in the world and today hold the spot of the 6th largest economy in the world. The vision of the union budget 2019 is to pave a pathway for India to become a $5 trillion dollar economy over the next few years.

*The author is Minister of State for Shipping (Independent Charge) and Chemical and Fertilizers