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Ev Revolution Good News For Environment But Will Cost Government Short Term

Ev Revolution Good News For Environment But Will Cost Government Short Term

Across the globe, there is a perceptible shift from petrol/diesel-powered vehicles towards those which run on electricity. While EVs may be in a minority right now, all indications are that they will soon be competing with their internal combustion engines counterparts.

This is great news from the perspective to meet lower carbon emission targets. But, in the short term, it spells disaster for the governments tax revenues if the demand for petroleum products falls.

1.

FAME II Subvention

The government has approved Phase II of the FAME Scheme, with an outlay amount of Rs 10,000 crore. This will be in place for 3 years starting from 1 April 2019. As the Rs 10,000 crore limit has not been exhausted, it is possible that the FAME Scheme could be extended beyond April 2022.

2. How much do petroleum products cost to the State and Centre Taxes

a.The centre taxes on petroleum products accounted for between 14 and 20 percent of the total gross tax revenue.

It was Rs 2,87 500 crore in FY20, which was 14.3 per cent of the Centre’s total gross tax revenue

It was Rs 4,19.800 crore in FY21 which was 20.7 per cent of the total Centre’s gross tax revenue

b.The state taxes on petroleum products accounted for about 11 percent of the total gross tax revenue

It was Rs.2,07 800 crore in FY20, which was 11.1 per cent of the total state tax revenue

It was Rs 2,09 100 crore in FY21, which represented 11.4 percent of total state tax revenue

3.The government holds a majority of BPCL HPCL, ONGC, OIL, OIL, and ONGC. The shift from EVs will have an impact on volume sales and thereby affect some of the planned divestments.

Company            GOI stake

BPCL                     52.98

See Also

HPCL                     54.90

IOC                         51.50

ONGC                    60.41

OIL India              56.66

(Edited By : Priyanka Deshpande)

First published:IST

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