Budget 2012 fails to promote green tech

ENERGY SECURITY AND climate change are of critical importance to all countries around the world, but perhaps most so for India. Our nation’s dependence on foreign crude oil imports exceeds 80 percent, a figure that continues to rise precariously.
The annual Yale/Columbia Environmental Performance Index, presented during the World Economic Forum in Davos, found that India ranks dead last in the world in air pollution affecting human health – beating China, Pakistan, Bangladesh, and 129 other countries. Fine particulate matter, much of it from vehicle emissions, is responsible for acute respiratory infections – which cause 13 percent of in-patient child deaths in India, according to the WHO – and cancer.
To tackle these challenges, every major government is expanding already-significant programs for transport electrification. The US just announced an increase in its electric vehicle purchase subsidy from $7,500 to $10,000 per car, China’s subsidies are almost twice that in some cities, and Europe has major new programs as well. In India, however, the new Union Budget is moving backwards, and we are very disappointed by the lack of vision it shows in moving India towards an electrified, zero-emissions future.
The Budget offers no benefits to the EV industry, and the increase in various duties/cess will increase the cost of EVs by 1-1.5 percent. The increase in basic excise duty for cars, from 5 to 6 percent, will result in a 1 percent increase in EV prices. Excise on parts (input) has increased from 10 to 12 percent. Lithium batteries are still exempt from customs duty, but the increase in Countervailing Duty (CVD) from 5 to 6 percent will increase the cost of batteries.

Last year, the central government announced the National Mission on Electric Mobility, aiming to bring India on par with the rest of the world in promoting EVs and addressing energy security concerns. We are hoping the Mission’s recommendations will be implemented later this year. However, in the meantime, the existing EV purchase subsidy from the Ministry of New and Renewable Energy – 20 percent of ex-factory price, up to Rs 1 lakh – is expiring on March 31, 2012.
At a time when every other government is expanding incentives to help build a critical mass of EV users (which would in time reduce the need for subsidies), India’s incentives are lapsing. In a few days’ time, the price of EVs will go up almost 20-30 percent in India.
There is no quick-fix solution to the dual stranglehold of oil dependence and toxic air pollution in India, but intelligent policies can help us advance in the right direction. A concrete, long-term vision that moves towards domestic renewable energy production, incentivises transport electrification, and supports clean tech R&D is the way forward. Almost every other major nation’s central government is doing this, and our problems are worse than theirs. We are hopeful that the Indian government will wake up and act before it is too late. Will we tell our children that we left them a country in a worse state than what we received from our parents, simply because we didn’t have the courage to make a change?
"The 2012 Budget shows a lack of vision in moving India towards an electrified, zero-emissions future.Will we tell our children that we left them a country in a worse state than what we received from our parents, simply because we didn’t have the courage to make a change?"