Govt To Get Rid Of Petrol, Diesel Cars, Says Gadkari; What Has Govt Done So Far?

Union Minister for Road Transport and Highways, Nitin Gadkari, said that he has embarked on an ambitious mission to rid the county of petrol and diesel vehicles. Gadkari stated that his recent proposal to reduce Goods and Services Tax (GST) on hybrid vehicles is a milestone towards eliminating over 36 crore petrol and diesel-powered vehicles from Indian roads. The mission is "One hundred per cent" possible Gadkari said, adding, "It is difficult but not impossible. This is my vision." Such a revolution in India's automotive sector will free a staggering Rs 16 lakh crore currently spent on fuel imports, which Gadkari said can be used for the betterment of farmers and rural population, and also to provide employment prospects for the youth. "I cannot give you a date and year for this transformation to take place as it is very difficult. This is difficult but not impossible...A revolution is taking place. The fuel imports will end and this country will become self-reliant - Atmanirbhar Bharat. I strongly believe in this," Gadkari said.

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Central to Gadkari's vision is the speed with which electric vehicles are being adopted in the Indian market and he believes the next era will be of alternative fuels and biofuels. "I roam around in a car that runs on hydrogen. You can see electric cars in every other household. People who used to say this was impossible, have changed their views now and started believing in what I have been saying for the last 20 years," the minister said.

He expressed confidence in the Indian auto manufacturers like Bajaj, TVS, and Hero to play a major part in this transition. They are currently producing motorcycles equipped with flex engines, which can run on alternative fuels such as ethanol. Similar auto-rickshaws are also on the way he said. India has already launched a 100 per cent ethanol-fueled variant and hydrogen-powered car.

Is This Transition Likely & What Does Government Do To Bring It?

Gadkari's vision is also supported by a global trend towards alternative fuel-powered vehicles. Reports from Reuters yesterday on April 2, 2024, indicate that by early 2025, Norway will have more battery electric vehicles than petrol cars. Norway will be the first country to achieve this feat.

The Road Transport Ministry has already sent proposals to the Finance Ministry to reduce GST on hybrid vehicles to five per cent from 28 per cent. Currently, hybrid vehicles are taxed at a whopping 28 per cent GST if it is smaller than 4 metres in length and 43 per cent if it is over 4 metres. The Union Transport Ministry has also proposed to reduce GST to 12 per cent for flex-fuel vehicles (FFVs), that can run on an ethanol-petrol blend with up to 85 per cent ethanol.

Additionally, for electric cars, incentives such as reduced import taxes on electric vehicles of companies that commit to at least USD 500 million in investment, are in the pipeline. These imports will attract a much lower customs rate of 15 per cent which would have been 70 per cent.