To revive growth in the bicycle industry, the segment’s leading manufacturer Hero Cycles has sought the extension of FAME-II benefits to electric bicycles. The company is also batting strongly for a reduction in GST rates on bicycles from the existing 12 per cent to 5 per cent in the upcoming budget. According to the cycle-maker, these initiatives will help in reviving demand for bicycles. The country is currently facing a slump in rural consumer demand, with rural household consumption dropping to a seven-year low in the quarter ending September 2019.
“Bicycles are largely consumed by low-income group and rural populations, so it needs to be made cheaper by slashing GST from the current 12 per cent to the lowest 5 per cent slab,” said Pankaj M Munjal, chairman and managing director of Hero Motors Company. The last Union Budget had given a strong push to e-mobility in the country by announcing sops for manufacturers as well as buyers. However, the benefits of manufacturing subsidies for electric vehicles under the central government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME) -II initiative were not extended to low-speed electric two-wheelers.
The company feels that the inclusion of electric bicycles in the FAME-II initiative will provide a much-needed boost to the sector. “We hope the government recognizes the need to promote electric bicycles as much as the need to promote electric cars. Electric bicycles are both eco-friendly and space-friendly and also offer a viable solution to the problems like traffic congestion, lack of charging infrastructure as they can be easily pedaled back in case of battery loss.
Extending the subsidy benefits of FAME II to electric bicycles will help manufacturers offer more affordable products to consumers and help boost their usage,” added Munjal. There is need for patronage from government for faster adoption and manufacture of e bicycles.