According to highly-placed sources, tax incentives and other sops might be given to the industry for manufacture of EVs in the Budget 2019-20 which will be presented to the Parliament on Friday.
In 2015, the Faster Adoption and Manufacturing of Electric vehicles (FAME) scheme was launched with an outlay of Rs 795 crore. The initial outlay was for a period of two years, commencing from April 1, 2015, but was extended up to March 31, 2019.
Recently, FAME India Phase II was launched, with effect from April 1, 2019, with a total outlay of Rs 10,000 crore over the period of three years. Emphasis in this phase is on electrification of public transportation.
Even the Economic Survey which was presented on Thursday highligthed the importance of the segment. It recommended that the government frame appropriate policy measures to lower the costs involved in their overall lifetime ownership.
As per the survey, EVs hold enormous potential not only "because it is environment-friendly but also because India can emerge as a hub of manufacturing" which will generate employment and growth opportunities.
"It may not be unrealistic to visualise one of the Indian cities emerging as the Detroit of EVs in the future," said the Survey tabled in Parliament by Finance Minister Nirmala Sitharaman on Thursday.
"Appropriate policy measures are needed to lower the overall lifetime ownership costs of EVs and make them an attractive alternative to conventional vehicles for all consumers."
Currently, the market share of electric cars in India is only 0.06 per cent, whereas it is 2 per cent in China and 39 per cent in Norway.
Globally, the sales of electric cars have been rising at a fast pace from just over 2,000 units being sold in 2008 to over 10 lakh in 2017.
The survey also highlighted that the market share of EVs increases with higher availability of charging infrastructure.
"It, therefore, becomes important that adequate charging stations are made available throughout the road networks," it said.
"In India, the limited availability of charging infrastructure seems to be a major impediment to increased adoption of EVs," it added.
( With inputs from IANS )