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Government proposes exemption of registration fees for battery operated electric vehicles

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Government proposes exemption of registration fees for battery operated electric vehicles

Top sources in the Ministry of Road Transport and Highways said that the move is to provide a boost to battery-operated or electric vehicles in the country. The ministry has kickstarted the exercise to bring in differential registration fees under the Central Motor Vehicles Rules, 1989.

To promote greener, non-polluting vehicles on Indian roads the Ministry of Road Transport and Highways on Wednesday issued a draft notification to exempt battery operated vehicles from paying registration fees.

Top sources in the ministry said that the move is to provide a boost to battery-operated or electric vehicles in the country. The ministry has kickstarted the exercise to bring in differential registration fees under the Central Motor Vehicles Rules, 1989.

Also, the Ministry of Road Transport and Highways on Wednesday issued a draft notification (dated 18th June 2019 vide GSR 430 (E)) to amend Rule 81 of the Central Motor Vehicles Rules. The amendment proposes to exempt battery operated vehicles from payment of fees for the purpose of issue or renewal of registration certificate and assignment of the new registration mark. This means that electric vehicles would be exempted from such registration charges.

The draft has been issued for receiving comments and suggestions from stakeholders. Under the new rules, battery operated two, three and four-wheelers, will not have to pay fees for fresh registration or renewal of the certificate.

The government has been trying to promote the shift towards electric vehicles to combat air pollution, reduce dependence on expensive US dollar driven oil imports and generate employment.

The Parliament had passed the Motor Vehicles (Amendment) Bill in 2015, which categorised battery-powered e-rickshaws as a valid form of commercial transport in India. With their small size and small turning radius, e-rickshaw is already a popular mode of transport in Delhi-NCR, particularly in narrow lanes and congested areas.

Though concerns have been there about the road safety features of the e-rickshaws, the govt has been intent upon promoting their deployment. In fact, Prime Minister Modi had kickstarted a major exercise to encourage the use of e-rickshaws as a means to reduce pollution as well as increase fruitful employment by distributing vehicles on soft lending terms to jobless in his Lok Sabha constituency Varanasi in 2014.

Over the last few years, a silent electric-vehicle revolution is gaining momentum in India, driven not by passenger cars but e-rickshaws.

By October 2018, India had about 15 lakh battery-powered, three-wheeled rickshaws. In New Delhi, an entrepreneur has launched an Uber-style app named SmartE and is plying 1,000 odd e-rickshaws. Ola also plans to introduce 10,000 e-rickshaws this year in India, which is the world's fourth-largest auto market.

While China already has nearly 13.5 lakh electric vehicles driving on its roads, the figure stands close to 7,000 in India. So tepid is the response that India's largest automaker, Maruti Suzuki India will roll out its first electric vehicle only by 2020. In fact, in the last fiscal for every electric vehicle sold in India 5 diesel or petrol driven automobiles were bought.

Modi government is promoting electric vehicles in public transportation and fleet operations ranging from two-wheelers to buses. But the shift away from polluting vehicles needs the construction of a large ecosystem for the electric vehicles. Battery operated and electric vehicles need charging and battery-swapping stations. By the start of 2018, India had about 425 charging points. Conscious of the need, the government plans to increase this figure to 2,800 across the country by 2022. The next bottleneck for the switch is the lack of cheap financing for e-rickshaws.

Another hindrance is the lack of bank financing for traditional rickshaw drivers, who belong to low-income category and don't have the capacity to repay loans with high rates of interest. By taking the step to end registration fee for e-rickshaws, the government plans to reduce the initial capital involved in the purchase of the vehicles. The government estimates say that a conducive atmosphere can lead to the sales of these vehicles jumping to 2 crore units every year.

"If the right conditions are created and a slew of incentives are provided this sector can absorb many who are jobless or those who are struggling low-income levels. Less pollution will be the secondary benefit," a senior ministry official said.