Govt must step up its expenditure to ensure that the growth in investment is sustained

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Govt must step up its expenditure to ensure that the growth in investment is sustained

  • According to the recently released data by the Ministry of Statistics and Programme Implementation, India’s gross domestic product grew by 8.4 per cent in the second quarter of the current financial year.
  • In absolute terms, at Rs 35.74 lakh crore, India’s Q2 GDP crossed the pre-Covid level of Rs 35.62 lakh crore in Q2 of 2019-20.
  • On the expenditure side, what is most promising is the 11 per cent growth in gross fixed capital formation (GFCF) — a sharp recovery after a 9 per cent contraction in the same quarter last year.

What are Electric Vehicles (EVs)?

  • Electric vehicles, unlike conventional petrol and diesel vehicles, use one or more electric motors for propulsion rather than the internal combustion engine.
  • Electric vehicles have a battery that is charged by means of electricity supply.
  • The electric energy is then stored and used to run the electric motor.
  • There are different types of electric vehicles. It includes fully electric vehicles and hybrid electric vehicles (Electric Motor + Combustion Engine).

Advantages of Electric Vehicles:

  • Environment/Health:

  • Vehicles with Internal combustion (IC) engines cause half of the pollution in the cities as they emit harmful gases like Carbon Monoxide, Nitrogen Oxides, Sulphur Dioxide, Hydrocarbons, etc. = Air pollution & Global warming.

  • The air pollution induces deadly diseases particularly for elderly people, pregnant women, and children.

  • IC engines also cause noise pollution in cities.

  • On the other hand, Electric Vehicles are 100% environment-friendly as they do not emit toxic gases or smoke in the environment which leads to global warming + they also operate quietly compared to conventional vehicles.

  • It will help India in its commitment to the Paris Climate Agreement.

  • Thus Electric vehicles provide the possibility of not only eliminating the pollution from cities but also improve the health and the environment as a whole.

  • Economy:

  • Oil Imports: India is the 5th largest importer of oil, importing more than 2.2 million barrels a day to satisfy around 70% of demand in the country. Most of the consumption of oil is in the transport sector. Therefore electric vehicles can significantly reduce India’s oil imports = reduce Current Account Deficit.

  • Cost-Effective: With the advent of advanced technology and dedicated R&D, the cost and maintenance of electric vehicles have gone down. The government is also incentivizing the use of electric vehicles by providing subsidies and lower motor taxes on EVs.

  • Less Maintenance: Less Fluids (for oil and transmission) to change + Less Moving Parts in EVs = Less Maintenance.

What are the disadvantages of Electric Vehicles?

  • Less Range: Electric engines provide only limited mileage. Complete battery recharge takes up to 8 hours and there is a lack of quick charge plug-in stations available across the country.
  • Less Power: The top speed of electric cars is at 70 mph (even less for smaller electric vehicles) which makes them a poor bet with highway driving.
  • Costly: Electric vehicles are costlier than gasoline-powered vehicles within the same range due to the hefty price of the lithium-ion batteries. Moreover, the insurance cost will be estimated to be higher for electric vehicles than conventional ones due to the danger of running out of power in a bad spot, its higher cost, and the dangers associated with electricity. Lastly, maintenance costs as a result of new technology and developing skills make electric cars even more costly.
  • A small amount of Pollution: Even though electric vehicles are classified as green cars, the toxicity of batteries is high and not all electricity is derived from renewable energy sources.

Government Initiatives:

  • The government aims to see 6 million electric and hybrid vehicles on the roads by 2020 under the National Electric Mobility Mission Plan 2020.
  • Faster Adoption and Manufacturing of Electric Vehicles in India (FAME India Scheme) for improving electric mobility in India.
  • The GST reduction for electric vehicles from 12% to 5%.
  • The Union power ministry categorized charging of batteries as a service, which will help charging stations operate without licences.
  • Implementation of smart cities would also boost the growth of electric vehicles.