Million electric bus plan nears gates of PMO

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₹1.5 crore each after subsidies, does not drain state coffers. “Since states may not be able to fund the expense of replacing these buses, there will be a lease model available for states," said one of the persons cited above. That would be similar to the opex model being followed for electric buses in the Faster Adoption and Manufacture of Electric and hybrid Vehicles in India (FAME-India) programme.

In this scheme, the intermediary companies buy the buses and lease them to states at rates ranging from ₹50-100 per km with a minimum use guarantee. “The FAME scheme has been very helpful in the faster adoption of electric buses and promoting e-mobility across the country," said Aanchal Jain, chief executive officer of PMI Electro Mobility, a maker of electric buses. “Higher adoption of electric buses will drive forward the local economy and the entire bus manufacturing ecosystem with larger players investing in capacities, higher indigenization of bus and bus parts and, in the process, more new jobs will be created." The proposal to the PMO may also include a suggestion to lower the GST rate on components for electric buses, especially battery cells, to 5% from 18% today.

The EV industry has an inverted duty structure, where the GST rate on key inputs like battery cells and other components ranges at 18-28%, but when they sell a bus, they can only charge 5% GST. This often leads to unutilized input tax credit with manufacturers. To create enough charging stations for the buses, the proposal looks to rope in NTPC Ltd and Power Grid Corp.

of India Ltd to develop the infrastructure. The proposal is intended to cut emissions and India’s oil import bill, while also fostering a local EV manufacturing ecosystem. If approved, this