Govt to set up Rs 740 cr electric vehicle R&D fund in 12th plan

To be formally announced next month, this allocation is part of a Rs 2,541 crore budgetary spend on the auto sector across the Plan period.

With rising petrol and diesel prices making it tough to tame inflation, the Government is now planning a serious policy push towards developing alternate automotive technologies.

A fund of about Rs 740 crore for research and development in electric vehicles (EVs) and hybrids is likely to find its way in to the 12th Five-Year Plan, officials connected with the development told Business Line.

“This fund will be used in projects for developing new technology in EVs and hybrids along with the industry, foreign technical collaborators and other domestic institutions, such as the IITs.

The industry is also expected to contribute, as the Government will only fund research and not manufacturing,” the official said.

To be formally announced next month, this allocation is part of a Rs 2,541 crore budgetary spend on the auto sector across the Plan period. It also follows the Government's Budget 2010-11 announcement of forming a ‘National Mission for Hybrid and Electric Vehicles' with the industry and academia.

“Many foreign players such as Toyota are interested in investing in EVs, but are waiting for the policy. They are looking to make and develop components domestically if feasible,” the official said.

Under this programme, research facilities for such technologies will be set up at Automotive Research Association of India, Pune and the other six Government-run auto homologation and testing centres under National Automotive Testing and R&D Infrastructure Project (NATRiP).
Investment pattern

The investment figure of Rs 740 crore was arrived after consultations with industry body Society of Indian Automobile Manufacturers and Booz and Co, a consultant hired to draft a report on potential of the EV sector. Booz, in fact, had suggested a Rs 1,000 crore fund, which had later been scaled down by the Ministry of Heavy Industries.

Apart from the EV R&D fund, Rs 991 crore from the Rs 2,541 crore allocation is for completion of the NATRiP (total spend Rs 2,288 crore) and Rs 7-8 crore for a National Automotive Board that is scheduled to be set up.