Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Wednesday 20 December 2017

FAST FORWARD IN FOURTH GEAR


NITI  proposes  :  SIAM  postpones

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NITI  Aayog has proposed that India completely switch over to Electric Vehicles by 2030


Yesterday , SIAM ( Society of Indian Automotive Manufacturers ) submitted a white paper to the Ministry of New and Renewable Energy ( MNRE ) , saying :


·         going by the current rate of production and sales it will be difficult to move all the vehicles to electric by 2030

·         we can move 40% of the total vehicles by 2030

·         we can switch over to 100 % E-Vehicles , only by 2047

·          


No doubt , Indian Auto Manufacturers are a hard-headed practical lot , with their feet  solidly on the ground


They know the hurdles to be faced in such a revolutionary transport transformation

So , it is no surprise that they have taken a safe / less risk , approach


As an “ Interest Group “ , they had to present a “ Common Front “ to the Government


But , no one need doubt that in their “ Individual Capacity “ , each auto manufacturer is a “ Rational Player “ , working double-time to get ahead of the competitors to grab a bigger share of the “ Market Pie “ , as explained below :

=======================================================


In its mildest form, rationality implies that every player is motivated by maximizing his own payoff.

In a stricter sense, it implies that every player always maximizes his utility, thus being able to perfectly calculate the probabilistic result of every action.




Now , imagine that the ROAD-MAP DOCUMENT for ELECTRIC VEHICLES ( - which is expected to get released by the Transport Ministry by this month-end ) , contains the following provision :


EVICT [ Electric Vehicle Incentive Corporate Tax ] Scheme :


·         The annual revenue ( income ) through sale of Electric Vehicles will be exempt from Corporate Income Tax


·         There will be a GST of 5 % on sale of Electric Vehicle and of 25 % on Petrol / Diesel Vehicles


·         The income from sale of Petrol / Diesel vehicles will be subject to normal Corporate Income tax @ 30 %


·         For the same period, sale of India-manufactured Lithium-ion Batteries will be exempt from Corporate Income Tax


·         This provision will commence from 01 April 2018 and expire on 31 March 2035


All Auto Manufacturers will need to submit to the Transport Ministry , an Annual Return , showing the break-up of Sales ( Numbers of Vehicles and Revenue – wise ) between the Petrol-Diesel and the Electric Vehicles ( with copy to Finance Ministry )

 


I get a feeling that , if such a provision were to be part of the ROAD MAP , that “ Road “ will , suddenly shrink from year 2047 to year 2027 – without needing any persuasion  !


And , without having to offer any other Incentive / Subsidy [ ala Piyush Plan of 25 March 2015 ] “ , either to Auto Manufacturers or to the buyers !

Reason ?


With no Corporate Income Tax and a GST of just 5 % , Auto Manufacturers will be able to price their Electric cars, 25% BELOW the selling price of equivalent Petrol car !


Lower price driven demand will ensure early adoption without other incentives


Not only that

To ensure that the buyers of E Cars do not suffer from “ Range Anxiety “ [ in absence of Battery Charging Stations , at every kilometre distance ] , the Auto Manufacturers will come up with ISRO-inspired E Cars with Solar Roof Top Panels , charging a 5 Kwh Lithium-ion Battery !


And charging from domestic electric outlet at home , overnight !

Dear Shri Nitin Gadkariji :


In the past ( by being angry and bulldozing ) , you have not endeared yourself to the Auto Manufacturers )


But by announcing the EVICT Scheme in the current session of Lok Sabha, you will set in motion the wheels of an unprecedented industrial revolution !



20  Dec  2017



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