NEW DELHI: Tax breaks on electric vehicles (EVs) and subsidies for renewable energy can encourage a shift toward low-carbon lifestyles, the Economic Survey 2024-25 stated on Friday.
“There are several effective mechanisms to promote low-carbon lifestyles and advance sustainable development… Financial incentives such as tax breaks for electric vehicles and renewable energy use subsidies can motivate individuals and organisations to adopt greener practices,” the survey noted.
This observation comes as the government has reduced direct subsidies for consumers purchasing battery-powered two-wheelers and three-wheelers. Subsidies for electric car purchases have been completely removed under the PM E-DRIVE Scheme. However, EVs continue to benefit from lower GST rates and other incentives.
The survey also highlighted China’s dominance in the global EV and renewable energy sectors, emphasising the need for India to adopt policies that mitigate supply chain risks. Many critical minerals essential for EV manufacturing are either scarce or not processed in India, with their supply concentrated in a few countries. China holds a significant share in the processing and production of these minerals worldwide.
For key commodities such as Nickel, Cobalt, and Lithium, China is responsible for processing 65%, 68%, and 60% of global output, respectively. In the case of rare earth minerals, China contributes 63% of global mining and 90% of global processing output.