In a major move to encourage green vehicles in the nation’s capital, the New Delhi Government has decided to grant 30 percent subsidy for battery operated vehicles. The notification in this regard would be issued within a week.

Actually, the total exemption sums up to 29.5 percent, which comprise of 12.5 percent of Value Added Tax (VAT), 15 percent of total cost and 2 percent of road and registration.

Battery operated cars, which costs Rs 3.5 lakh will now become available at Rs 2.5 lakh. Thus the battery operated cars would become affordable by a larger section of buyers, thereby contributing to cleaner ambient air.  The provision can be availed by only 2000 eco-friendly cars in the first year.

According to an official the exemption will cost Rs 35 crore to the state exchequer. The size of beneficiaries could be increased if the response to battery operated vehicles is encouraging, the official opined.

The proposal to provide subsidies for battery-operated vehicles was forwarded by the Delhi State Environment Department. The move is aimed at making Delhi greener, before 2010 Commonwealth Games.

The ambient air quality of Delhi has been the concern of residents. Environmentalists have stated that the source of air pollution is largely due to vehicle emissions. Last week, the Delhi Transport Department has stated that cars over 15 years old will be pushed off the roads.

To meet the costs of subsidy, an air ambience fund has been created wherein 25 paise per liter for diesel will be levied. The government has plans to raise Rs 48 crore from this move.

It will not be the first time that battery operated vehicles has been provided sops in the country. The states of Karnataka and Rajasthan have exempted these vehicles from road tax. The other states – Andhra Pradesh, Goa, Orissa, Pondicherry, Rajasthan, Uttarakhand and Chandigarh have waived off VAT for such vehicles.

Battery operated electric cars are eligible for 100 depreciation free parking and exemption tax in United Kingdom. Other countries like Japan, USA, Italy, Norway, Sweden and Ireland have also provided various subsidies.