IB Economists

  The Delhi government has announced an incentive on the purchase of electric vehicles, upto Rs. 30,000 on two wheelers and Rs. 150,000 on four wheelers. The incentive will come in the form of a subsidy which will allow producers to produce at lower costs and therefore are likely to reduce prices for consumers. This will funded by the pollution cess and road tax on fuels. India has very few electric vehicles due to high tariffs on importing electric vehicles and also lack of domestic production. Although Two wheelers have become famous in the country due to previous central government initiatives such as FAME, these initiatives have not been  very effective.  E- Vehicles are beneficial for the environment since they reduce the greenhouse emissions and are also considered to be on average low cost. One of the reasons for a lot of companies to not produce in India was the high cost and less availability of spare parts. This assistance gives the producer an incentive to manufacture in Ind