Gadkari to Support Industry Proposal of Including Electric Vehicles Under 'Priority Sector' Lending Norms

Nitin Gadkari, the Union minister of Road Transport, Highways & MSME said that the government is working towards making India a global automobile manufacturing hub in the next five years. "The government is already making policies to support the industry," he added. Responding to a suggestion by Pawan Goenka, MD, Mahindra and Mahindra to put EVs under Priority Sector Lending, Gadkari assured of extending 'all necessary support'. “I would suggest FICCI can draft a note that I can propose to the Finance Ministry. I assure of my support in trying to get the same sanctioned,” said Gadkari.

Under the Priority Sector Lending norms banks are mandated to provide a specified portion of the lending amount to the sectors that have been approved for receiving loans so as to help such sectors see an all-round development. Agriculture and allied activities, SMEs, Housing for poor, education for students from economically weaker sections are some examples of sectors that are identified for 'priority lending'.

EV makers, Gadkari said, must decentralize their supply chains and companies need to focus on procuring raw materials and production of battery cells locally on a continued basis. Road transport in the country is undergoing a shift and he urged everyone to adopt eco-friendly mobility solutions. “I hope to see cleaner and more sustainable innovation from the industry as we move towards a greener tomorrow,” said Gadkari.  

Addressing the conference Gadkari said, “The future is very bright and India has the potential to become the largest Electric Vehicle (EV) market in the world as the government continues to push for EV adoption,” he added. Gadkari said that Indian manufacturers have the capability to make efficient EVs that can not only create more jobs but also provide opportunities for exports. “e-Mobility is going to be the future mode of transport with greater efficiency and less impact on the environment. Import of crude oil and air pollution are two major concerns for the country. We need to have an integrated approach for EV,” he added.

He further urged FICCI and other stakeholders to come up with an integrated approach towards developing the EV sector in India. Referring to the NITI Aayog report, Gadkari said that India needs a minimum of 10 GWs per hour of cells by 2022, which will be expanded to 50 GWs by 2025. “We need to encourage the manufacturing of these cells in India. I urge the industry to think about manufacturing e-batteries in the country. We need to have a policy that promotes cost-effectiveness, and is import substitute, pollution-free and indigenous,” he emphasized.

Gadkari also said that the government is working to launch an e-Highway between Delhi and Mumbai where e-buses and trucks would run. “We are going ahead with a pilot project; the Delhi-Mumbai corridor will become the lifeline of India and we plan to install new electric roads. Electricity as a fuel is available in the country, hence mass rapid transport on electricity is the most important solution for the country,” he added.

Pawan Goenka, Managing Director, Mahindra and Mahindra Limited said that India has a huge opportunity to become the world leader in the shared mobility and last-mile applications of EV to become suppliers of technology and products to the world. He said that businesses must invest in technology development and that India must have its own IPR. He also said that EVs can make a big contribution to Atmanirbhar Bharat. “With lower GST, fame incentives, and state incentives, the govt has done its bit. The onus now lies on the industry, service providers & the end-users to help in the adoption of EVs,” he added.

Shekhar Viswanathan, Chairman, FICCI EV Committee and Vice Chairman and Whole-time Director, Toyota Kirloskar Motor Private Limited said that with the advent of GST and subsequent reduction for EVs shows that the government is fully supportive. He further added that the shift towards electrification can’t be achieved without creating a vibrant manufacturing eco-system for EV parts in the country. This is a challenge that will require collaboration between the industry, government along with state governments and conducive policies that will facilitate investment viability for local manufacturing, he noted.