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Telangana introduces EV policy, exemption on road tax and registration

Tuhin Guha  | Updated: August 11, 2020, 05:34 PM IST

The Telangana government has approved a new electric vehicle policy for the state. Under this initiative, 100 per cent exemption on road tax and registration will be provided to the first two lakh electric two-wheelers and first 5,000 electric commercial four-wheelers. This subsidy also extends to 20,000 three-seater electric auto rickshaws. Also included are 10,000 electric LCVs, 5,000 private electric four-wheelers and 500 electric buses.

These cars will be supported by a proposed ecosystem for electric mobility that will include infrastructure such as charging stations and battery swapping facilities.

Unlike the Delhi government's policy that is aimed to promote EVs as a viable alternative to current forms of urban mobility, the Telangana government's focus is on developing the state into an EV manufacturing hub. Manufacturers and other industries related to EVs will be eligible for a 20 per cent capital investment subsidy capped at Rs 30 crore. There will also be a subsidy on power tariffs capped at Rs 5 crore while 100 per cent reimbursement of SGST will b provided. This is limited to Rs 25 crores and seven years. The government will also pay the interest costs for these firms, limited to 5.25 per cent for five years and capped at Rs 5 crore. Finally, other exceptions like that on stamp duty will be given.

The state is expecting a Rs 30,000 crore investment to be made in this industry. This should lead to 1.2 lakh direct and 2.5 lakh indirect new jobs. To make this happen, the Telangana government will be setting up two exclusive induatrial parks for EV industries over 775 acres. These will work with the infrastructure already created for the Electronic Manufacturing Clusters at Raviryal and Maheshwaram.

The Telangana and Delhi EV policy show that there are numerous ways that this integration of EVs into our society can begin. For Delhi, the more populist strategy of incentivizing individual to switch to EVs seems more suitable given its critical pollution problems. While for Telangana, this switch can be integrated deeper through all levels of the economy. This may lead to deeper integration but calls for deeper investment with a more long term plan.

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