The Karnataka Cabinet has decided to give 15% capital subsidy to investors in the electric vehicle sector. This decision came after the state felt immense pressure from a few states which offered apparently better sops.
Therefore, the Cabinet decided to amend its Karnataka Electric Vehicle & Storage Policy, 2017. Law minister Basavaraj Bommai said that the government will give a 15% capital subsidy on the value of fixed assets over five equal annual payments. The sops will apply to plots of up to 50 acres.
Apart from this, the government will also give a production linked incentive of 1% of turnover for a period of five years from the first year of commercial operations.
The state felt the need to amend the EV policy because a few other states such as Andhra Pradesh, Telangana, Tamil Nadu, Haryana and Gujarat offered seemingly better deals as their policies are of recent vintage. Karnataka was the first state to notify its EV policy more than three years ago. The government is also looking to create an EV cluster in Ramanagar district, near Bengaluru.