In an effort to incentivise electric vehicle buyers through cross subsidies, the government is considering a proposal to impose a marginally higher tax on conventional petrol and diesel cars.
The finance ministry thinks the proposal should be considered to avoid the additional financial burden that the government incurs as it incentivises buyers under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.
The move will also act as a catalyst for the promotion of electric vehicles, the finance ministry has said in a memorandum to the executive finance committee for phase two of the FAME scheme. Mint has reviewed a copy of the memorandum.
Industry experts say the move could impact car sales as it will discourage customers from buying petrol and diesel vehicles in a price-sensitive market like India. Read More