Govt. proposes Rs. 12,000 fee on new petrol/diesel cars

According to a media report, the NITI Aayog has proposed a plan to impose a fee of Rs. 12,000 on the purchase of new petrol and diesel cars.

The surcharge on cars will rise to Rs. 70,000 in the fourth year. As per the proposal, the surcharge on 2 & 3-wheelers and commercial vehicles would range from Rs. 500-25,000 in the first year and Rs. 4,500-90,000 in the fourth year.

The move is expected to generate around Rs. 7,500 crore in the first year alone. The funds will be used to incentivise electric vehicles (EVs) and the battery manufacturing industry. Incentives could range from Rs. 25,000-50,000 in the first year for those purchasing electric 2-wheelers, 3-wheelers and cars. These will be reduced to Rs. 15,000 by the fourth year.

Reports suggest that the government has also proposed a direct benefit to EV buyers. State agencies operating electric buses will be offered km-based incentives.

The government is also planning to offer an incentive of Rs. 6,000/kWh to encourage domestic battery production. The plan is to spend Rs. 200 crore on developing indigenous technologies. The government may also cover the entire cost of setting up charging infrastructure.

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