NITI proposes : SIAM
postpones
-----------------------------------------
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
www.hemenparekh.in
/ blogs
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