EV subsidy or private enrichment?

Question before policymakers is whether public money is being deployed to maximise public good, equity, and real environmental outcomes

- PRADEEP S MEHTA

LAST MONTH, WHILE hearing a long-running matter on air quality in Delhi-NCR, the Supreme Court issued a pointed caution: There cannot be a single-technology solution such as electric vehicles (EVs) introduced without first examining its consequences for its carbon friendliness and the cost to the economy and the people.

All such interventions must demonstrably serve the larger public good and therefore the apex court underlined the need for evidence-based, citizen-centric policymaking rather than narrow or siloed approaches. This judicial observation is timely, because India’s current approach to promoting EVs raises precisely these concerns.

India’s EV push is often framed as essential to achieving two critical imperatives—reducing oil imports and lowering carbon emissions.These are undoubtedly important policy goals. But even well-intentioned transitions must be assessed through the lens of outcomes, efficiency, and fairness in the use of taxpayer money.

Over just the last three years, India has spent close to ¥30,000 crore in direct and indirect support for electric cars. This includes purchase incentives, a lower goods and services tax rate, and widespread waivers on registration and road taxes. Yet, despite more than a decade of active policy support, electric cars still account for only about 4% of new car sales in the country.

Such a wide gap between fiscal effort and adoption outcomes warrants serious examination.