The Centre has decided to give subsidy to state government departments and cities with a population of over one million to promote e-vehicles and improve air quality. City authorities can claim up to 60 per cent subsidy for electric buses.

Expression of Interest (EoI) has been invited from stakeholders for availing incentives to purchase electric buses, cars and three-wheelers.

The Central government will provide an upfront grant of 60 per cent of the cost of each electric bus up to a maximum of `1.5 crore.

For three-wheelers and four-wheelers, the maximum limit is `61,000 and `1.38 lakh respectively.

Each city authority can claim up to `105 crore during the current year (2017-18) on purchase of e-vehicles under the government’s FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) India scheme. The Ministry of Heavy Industries will give the incentives as part of a pilot project. The funding would be available for vehicles that run on a new-generation battery without any lead.

Incentives would be provided to buyers as well as consumers in the form of reduced price. Funds will also be provided for setting up charging infrastructure with a maximum limit of `15 crore per city.

The government had started giving subsidy to manufacturers under the FAME scheme aimed at promoting the use of electric and hybrid vehicles.

The Centre has set a target of 100 per cent electric vehicles by 2030. The National Electric Mobility Mission Plan (NEMMP) target is seven million electric and hybrid vehicles by 2020.

The industry feels that demand for electric vehicles will go up as a result of government policies. While a few Indian auto companies like Mahindra already manufacture electric vehicles, more will join the fray as the government speeds up the process.  Rising pollution levels in the cities have prompted the government to push clean energy as an alternate source of fuel for public transport.