NEW DELHI:

Seeking to clarify his remarks on the taxation of diesel vehicles, Union minister Nitin Gadkari said on Thursday that he wanted to convey to automobile manufacturers the need to take steps to reduce pollution and also added that there is no proposal to levy a tax on such vehicles.

Earlier this week, the road, transport, and highway minister’s remarks regarding the need to levy a 10 percent tax on diesel-run vehicles to help cut emissions generated lots of controversy.

“I am not against diesel fuel, and neither are we going to levy any tax on diesel vehicles,” Gadkari  told CNBC-TV18.

The road transport and highways minister noted that, from a pollution point of view, diesel is very hazardous and is really causing health problems in the country.

Gadkari emphasised that he is not against any industry and pointed out that the government is already giving incentives for electric cars.

“So my suggestion to the industry is that the best way to reduce pollution is to concentrate on alternative fuel,” he added.

On September 12, speaking at the annual convention of automobile manufacturers body SIAM, Gadkari had said rising pollution levels are a serious health concern and there is a case for increasing taxes to dissuade the sale of diesel vehicles.

“I am requesting the Finance Minister to impose an additional 10 per cent GST on diesel engines and vehicles.This is the only way to phase out diesel vehicles,” he had said. But soon after, he took to social media platform X to clarify the government’s position.

“It is essential to clarify that there is no such proposal currently under active consideration by the government,” he had said in a post on X, referring to media reports quoting him as suggesting an additional 10 per cent GST on diesel vehicles.

Automobiles are currently taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle.

SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent. 

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

The number of electric vehicles in India has surged from just 2,400 a decade ago to over 27.4 lakh as of July 2023. File.
| Photo Credit: Ashoke Chakrabarty

The number of electric vehicles in India has surged from just 2,400 a decade ago to over 27.4 lakh as of July 2023. However, given the concurrent rise in the number of non-electric vehicles, the overall share of electric vehicles has still not crossed the 1% mark. Notably, there is also a wide inter-State disparity in the penetration of electric vehicles.

There has also been a dramatic shift in the class of electric vehicles over time. In the initial years, between FY2015 and FY2020, when the number of electric vehicles was growing at a relatively slow pace, the share of e-rickshaws in the mix was much higher than the share of electric bikes. However, in the last four fiscal years, as the absolute number of electric vehicles has increased at a quicker pace, the share of electric bikes has surged and surpassed the share of e-rickshaws.

Chart 1 | The chart shows the cumulative number of electric vehicles in India over time.

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As of July 14, 2023, India had 0.27 crore electric vehicles, 5 crore diesel vehicles, and 28 crore petrol vehicles. The share of electric vehicles was just 0.79%, with petrol vehicles forming over 80% and diesel motors contributing about 14.5%. The share of petrol/CNG hybrid (1.4%) was also higher than the share of electric vehicles, while with a 0.6% share, the petrol/LPG variant came close.

Chart 2 | The chart shows electric vehicles as a share of all vehicles registered in a State as of July 14, 2023.

Assam ranked first with a share of 2.2% electric vehicles, followed by Tripura (about 2%). Delhi, Bihar, Uttarakhand, Uttar Pradesh, and Goa had a share of over 1%. Among the major States, Himachal Pradesh had the lowest share with 0.11%, followed by Punjab (0.26%), Andhra Pradesh (0.40%), West Bengal (0.44%), and Madhya Pradesh (0.47%).

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Chart 3 | The chart shows the share of various types of electric vehicles over time.

In FY16, the share of e-rickshaws in total electric vehicles was 92% with other types such as two-wheelers, three-wheelers (other than e-rickshaws), and four-wheelers forming the rest of the 8%. Notably, an overwhelming number of e-rickshaws were used to carry passengers, while a few had carts for carrying goods or garbage.

Till FY20, there was no dramatic change in the share with e-rickshaws dominating with a market share of 82%. But the share of two-wheelers had started to rise by then. After FY20, the share of two-wheelers saw a drastic rise and peaked at about 60% in FY23, while the share of e-rickshaws came down to 32%. The latest financial year saw a small drop in the share of two-wheelers with the share of electric four-wheelers expanding beyond 5% for the first time. The share of electric three-wheelers other than e-rickshaws has remained below 5%.

Chart 4 | The chart shows the State-wise number of electric vehicles which are not e-rickshaws on the vertical axis.

The share of non-e-rickshaws among all electric vehicles is depicted on the horizontal axis. The size of the bubbles corresponds to the total number of electric vehicles. All figures are as of July 14, 2023.

The shift in the mix of electric vehicles in India from e-rickshaws to two-wheelers was led by Maharashtra, Karnataka, Tamil Nadu, Gujarat, Kerala, and Rajasthan. These States have a relatively high number of electric vehicles. The majority of these are not e-rickshaws, but two-wheelers.

On the other hand, in Uttar Pradesh, Bihar and Assam, e-rickshaws continue to dominate the share of electric vehicles. Therefore, these States do not contribute much to the shift.

vignesh.r@thehindu.co.in

Source: Vahan Sewa Dashboard, Centre for Energy Finance’s Electric Mobility Dashboard

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