Economic Survey Calls For Tax Breaks On EVs, Subsidies On Renewable Energy For Low-Carbon Lifestyles

India's pre-budget survey, highlighting various measures for environmental sustainability, notes that tax breaks on EVs and subsidies on renewable energy can encourage low-carbon lifestyles.

Hyderabad: Tax breaks on electric vehicles and subsidies on renewable energy can motivate people to switch to low-carbon lifestyles, suggests pre-budget Economic Survey 2024-25. Referencing the Emissions Gap Report 2020 from the United Nations Environment Programme (UNEP), the survey mentioned several effective mechanisms to promote low-carbon lifestyles and advance sustainable development.

"Financial incentives, such as tax breaks for electric vehicles and renewable energy use subsidies, can motivate individuals and organisations to adopt greener practices," the survey added.

The document also emphasised the need for policies to de-risk the electric vehicle (EV) supply chain by promoting a more self-reliant ecosystem. The survey highlighted China's global dominance over key components and raw materials in the sector and advocated for technology transfer agreements with other nations to diversify supply chains and reduce dependency on Chinese imports.

Indian government's efforts to promote environmental sustainability

The document mentions various measures adopted by the Indian government to promote environmental sustainability and influence economic behaviour, which include:

• Initiatives like the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM KUSUM) and PM Surya Ghar: Muft Bijli Yojana to encourage solar power adoption
• High excise duties on fossil fuels and incentives for electric vehicles push for greener alternatives
• The Ecomark scheme to certify eco-friendly household products
• The star-labeling scheme and ‘Go Electric’ campaign to raise awareness about energy efficiency and electromobility
• Market-based incentives, such as the Perform Achieve and Trade (PAT) scheme, to enhance energy efficiency
• Waste management regulations to minimise environmental impact
• Expanding city metro networks to promote a shift from private to public transport for a more sustainable transportation option

The survey also highlighted India's progress in promoting renewable energy and boosting domestic manufacturing of renewable energy equipment through the Production-Linked Incentive (PLI) scheme.

The need for public education

The pre-budget document also highlighted the need to educate the public about the environmental impacts of their choices. It suggested the use of campaigns that highlight the benefits of low-carbon alternatives and provide practical guidance to empower individuals to make sustainable decisions. The survey also suggested challenging existing habits and creating new norms around sustainability, which may include promoting cycling or local food initiatives.

The document also called upon to harness social influence. "By leveraging peer pressure and engaging community involvement through social media and local initiatives, we can inspire sustainable behaviours and help establish a culture where low-carbon lifestyles are the norm," it said.

Billionby 2032: Economic Survey