While the Indian Government's latest initiative of offering subsidy to electric vehicles is welcome, it alone will not make much of an impact if the government does not back it up with policy restructuring to attract greater investments in sources of power generation.

Year 2011 might just turn out to be the right time for buying an electric car, if you are toying with the idea of owning one. An incentive scheme initiated by the Ministry of New and Renewable Energy (MNRE) is all set to make the electric car you buy less expensive. Under the scheme, the government will provide financial incentives to electric vehicle makers in India in the current and next fiscals2010-11 and 2011-12in an attempt to boost the sales of the environment-friendly vehicles. The scheme, which is effective from November 11, 2010 and applicable till FY2011-12 (after which it will be merged with the National Electric Vehicle Policy that is being formulated), extends financial incentive of up to 20% on ex-factory prices of each electric vehicle sold, subject to the maximum limit of Rs 4 lakh for bus/mini-bus (minimum 10-seater), Rs 1 lakh for cars, Rs 60,000 for seven-seater three-wheelers, Rs 5,000 for high-speed two-wheelers, and Rs 4,000 for low-speed two-wheelers, the benefits of which the manufacturers are expected to pass on to the customers.

A notification issued by the MNRE, dated November 12, 2010, says that the government is "taking up dissemination of two-wheelers, three-wheelers, and four-wheelers, battery operated vehicles and R&D and technology demonstration and other activities in the area of alternate fuels for surface transportation at a total cost of Rs 95 cr during the remaining period of the 11^th Plan." In return, the manufacturers have to ensure that at least 30% of the components used in the electric vehicles are indigenous, with more indigenization of various components to be achieved in the due course of time. In addition, in what should come as happy tidings to the consumers, the manufacturers have to also give at least one year comprehensive warranty, including for batteries, and ensure the quality of their products and services while selling the vehicles to the customers. The manufacturers are also required to set up at least 15 service centers throughout the country, especially in their area of operation.

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