Positive Effects of This Year's Budget on Electric Cars
The government, with its recommendations in the Union Budget 2019, has made its stand on the Indian automobile industry quite clear. It wants electric vehicles to be the focal point of growth in this sphere, wants to promote local component manufacturing and is keener on maintaining this industry's long-term growth prospects.
What's changed for regular cars?
This year's budget didn't provide much respite for conventionally powered cars. The GST rate for these cars remains at 28 per cent, while fuel prices have been increased by Rs 2. Further, imported cars are set to be more expensive, the customs duty on them has risen to 30 per cent from last year's 25 per cent. Further, customs duty on some imported components has been increased.
Electric Vehicles have it good
The situation is brighter for electric vehicles (EVs). The government has made it easier than ever to buy EVs. The FAME2 policy has been approved and implementation has begun, which will help in the growth of EV-driven public transport and provide some impetus to developing the infrastructure needed to support EVs. The government will spend Rs 10,000 crore on FAME2 subsidies over the next three years. Further, the central government will spend Rs 100 lakh crore to develop infrastructure.
Buying EVs is now cheaper than ever before, as the government lowered GST rates from 12 percent to 5 percent. This comes on the back of last year's drop from 18 per cent. Alongside this is the up to Rs 1.5 lakh additional income tax deduction on loans taken to buy electric vehicles. Taking into account government estimates, these policy changes can drop the price of an EV by up to Rs 2.5 lakh.
It is also easier for manufacturers to make these cars in India now. EV manufacturers will be eligible for deductions in capital expenditure under Section 35AD (1) of the Income Tax Act. The customs duty on lithium-ion cells and other EV components is being reduced to zero, this will encourage local battery production and further bring down the cost of EVs.
Car insurance is imperative for a safe driving experience
While these new policies will affect your buying decision, what doesn't change is that you will still need car insurance. It's one of the most important add-ons you need with your car and one that is mandatory both by law and in spirit. Why is that so? The benefits of car insurance are far reaching. With this cover you can minimize the cost of repairing your vehicle in case of an accident. Even damages due to fire, theft and so on are also covered by car insurance policies. Lastly and most importantly, car insurance is also helpful to victims of an accident.
Even if you drive the safest, most technologically advanced car on the road today, being a responsible driver means keeping in mind the safety of your passengers and other road users. A motor insurance policy helps you do just that.