Hybrid and electric cars get a push

Indian government has proposed to set up a National Mission for Hybrid and Electric cars in order to encourage the production and sales of hybrid and electric cars. Not only this but the budget 2011-12 also offered to reduce excise duty for the development and manufacturing of the hybrid cars. At present the excise duty on the hybrid cars is 10 percent but the government has offered to reduce it to 5 per cent. Along with it the government has also proposed to completely clear the customs-vailing duty (CVD) levied on import of special hybrid parts.

Finance Minister Pranab Mukherjee while presenting the Budget said that the Indian auto industry has shown phenominal growth last year. The rapidly growing industry posted a growth of around 30 per cent this year and is tempting the auto biggies across the world to make investment in the second fastest growing industry. Finance Minister Pranab Mukherjee further added that the National Mission for hybrid and Electric Vehicles will be instituted in alliance with all the stakeholders. He also said that enough money has been spent over the hybrid and electric vehicles across the globe.

The finance Minister also said that the excise duty levied on hybrid cars is around 10 per cent but looking at the increasing demand of the eco friendly cars, a new technology has been developed which helps in converting fossil fuel cars into hybrid cars by fitting a kit. He said that in order to encourage the manufacturing of eco friendly vehicles, the excise duty should be reduced from 10 per cent to 5 per cent.

The Finance minister also mentioned that the the basic customs duty and special CVD on import of some specific parts of the eco friendly cars will be removed.
In November 2010, the government made an announcement of Rs 95 crore incentive package for the manufacturers of electric car makers for the rest of the period of the 11th plan. Commenting on the offer Society of Indian Automobile Manufacturers President, Pawan Goenka said that it will give a chance to develop new technology in India rather than importing technology.

Expressing his thoughts over the government's proposal Society of Manufacturers of Electric Vehicles President Naveen Munjal said that such kind of proposals will work in the favour of the auto industry. He further added that it will help in flourishing the electric and hybrid car segment in the Indian auto industry.

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