Government to encourage manufacturing of hybrid cars in India

Tuesday 15 February 2011, 00:00 AM by Vikas Yogi

The Indian government is working on a new policy to encourage production of hybrid cars in the country. The government plans to encourage car buyers to purchase hybrid cars through excise duty concessions. The move has been taken in a bid to reduce the country's dependence on fossil fuel and protect the environment.

According to an official, the proposal will be piloted by Heavy Industries and Public Enterprises Minister Praful Patel. The official added, "To encourage the production of these cars (hybrids), there is a need to upgrade the laboratory knowledge.” Moreover, the government is likely to incentivize research and development (R&D) in the field of Hybrid Cars so that highly efficient hybrid vehicles can be developed.

The ministry would also seek a Cabinet nod on the matter from a high-level panel. If it gets approved, it is expected that the panel will come out with a clear-cut policy by the end of third quarter this year.

At present, cars that run on conventional fuels, attract excise duty in the range of 10 per cent to 22 per cent, depending on their size. For increasing the production of Hybrid cars in the county, the government has to reduce the excise duty to a reasonably low level.

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