INTRODUCTION

The Punjab Electric Vehicle Policy, 2022 (“EV Policy”) originates from India’s national goal of promoting electric mobility and electric vehicles (“EV”) for better air quality, reduced noise pollution and lower greenhouse gas emissions. The Government of India has launched initiatives like Faster Adoption and Manufacturing of (Hybrid &) Electronic Vehicles (“FAME”) to accelerate EV adoption. To complement these efforts, the state government of Punjab has introduced the EV Policy. The EV Policy also emphasises the development of charging infrastructure, human capital, and research and development in green automotive technology, aiming to create a comprehensive ecosystem for electric mobility.

KEY FEATURES OF THE POLICY

Objectives:

The EV Policy aims for 25% of annual vehicle registrations to be EVs, with the following objectives designed to impact multiple UN Sustainable Development Goals (SDGs) directly and indirectly, fostering the growth of electric mobility: 

• Reducing Vehicular Emission – Reducing vehicular emissions by the end of the EV Policy.
• Infrastructure – Promoting the creation of public and private EV charging infrastructure in the state.
• Manufacturing – Establishing Punjab as a preferred destination for manufacturing electric vehicles, components, and batteries.
• Research & Development – Establishing Punjab as an R&D hub for EVs, led by a Centre of Excellence (CoE).
• Human Resource – Enabling job creation and introducing vocational (skilling and up-skilling) and academic training programmes to meet the human resource needs of the EV ecosystem.
• Ensuring sustainability – Minimising environmental damange by promoting recycling and reuse of discarded batteries.

Incentives under the EV Policy:

The policy incentives and measures introduced by the state governments can be categorised into three key areas:

• Consumer demand incentives
• Charging infrastructure incentives 
• Industry incentives

Industry incentives for Manufacturers:

The EV Policy offers multiple incentives to foster a conducive environment for the manufacturing of EVs, related components, and batteries, thereby promoting electric mobility in the state. In addition to specific incentives outlined in the EV Policy, all the benefits provided to the ‘thrust areas’ under the Punjab Industrial and Business Development Policy, 2017 (“PIBD Policy”) are also available to the EV sector industries irrespective of the manufacturing unit location in Punjab.

Benefits for setting up EV manufacturing units include:

• Fiscal Incentives: Incentives as a service enterprise under the MSME or large category under the PIBD Policy will be provided. 

• Infrastructure Support: Infrastructure in the form of readymade flatted factories with essential facilities such as power, water, sewage etc. will be provided to facilitate the establishment of ancillary units. Additionally, EV-related technology companies will be encouraged to set up in the vicinity of manufacturing facilities. 

• Concessional Land: The government will establish an industrial land bank facilitated by the Punjab Bureau of Industrial Promotion (PBIP). This initiative will provide suitable land to EV manufacturing units at concessional prices. The State EV Committee will assess the suitability of land for EV manufacturing, ensuring optimal allocation. 

• Industrial Hubs: PBIP will facilitate the creation of EV manufacturing hubs strategically located near state/national highways and with connectivity to Dedicated Freight Corridor (DFC) and airports. Eligible EV units will receive a 100% exemption from Change of Land Use (CLU) and External Development Charges (EDC). 

• Infrastructure Development: PBIP will oversee the development of necessary infrastructure for sector-specific parks, including approach roads, water supply, 24×7 industrial power, and common effluent treatment facilities, all essential for advancing electric mobility. Further, roads will be constructed to connect these parks to national/state highways, railway stations, and airports to facilitate seamless transportation. 

• Stamp Duty/Transfer Duty/Registration Fee Reimbursement: EV manufacturing units will benefit from a 100% waiver on stamp duty, transfer duty, and registration fees for their initial transaction and a 50% waiver for the second transaction per entity.

• GST Reimbursement: EV manufacturers will be reimbursed 100% of gross SGST on intra-state sales and 50% of gross SGST on inter-state sales for a period of 6 (six) years, capped at 200% of the fixed capital investment. 

• Electricity Duty Exemption: EV manufacturing units will enjoy a 100% exemption from electricity duty for a duration of 10 years, reducing operational costs and enhancing competitiveness. 

• Employment Subsidy: The government will provide employment generation subsidies for each male employee of INR 36,000 per year for 3 years and for each female and SC/ST/OBC (as certified by a government agency) employees INR 48,000 per year for the same period. These subsidies will not be restricted by domicile requirements, promoting inclusivity.

• Labour Flexibility: Anchor units will have the flexibility to operate three shifts (24×7), subject to applicable security guidelines for night shifts. 
• Incentives for Anchor Manufacturing Units: The first five anchor manufacturing units (units involving minimum fixed capital investment of INR 50 crores or minimum direct employment generation of 500) established after the policy’s implementation will receive incentives based on their total investment. The incentives range from INR 40 crore or 40% of total investment, whichever is lower, for the first unit and INR 30 crore or 30% of total investment, whichever is lower, for the second unit and INR 20 crore or 20% of total investment, whichever is lower for remaining anchor manufacturing unit.

CONCLUSION

The EV Policy aims to stimulate EV manufacturing in Punjab, attract investment, create employment opportunities, and establish the state as a prominent player in the electric mobility sector. The introduction of the EV Policy is a step in the right direction and is sure to benefit the stakeholders in the industry.