DNA Money Edit: Automobile policy needs to be consistent

The government recently took a U-turn over electric vehicle (EV) policy. After all the hoopla created around EVs in the past one year, the draft new automotive policy now looks forward to finalising a 'technology agnostic' green mobility roadmap. The development again ends up sending a wrong signal to investors, who have long been demanding consistency in the policies.

The government had earlier expressed its intentions to make EVs mandatory after year 2030. While the announcement seemed ambitious right from the start, it ended up creating chaos among the vehicle manufacturers as they are still not done investing in BS-VI emissions technology, which is set to get mandatory from April 2020.

A global head of a leading motorcycle brand said the frequent flip-flops create confusion among investors, and the situation is such that it is very difficult for the vehicle manufacturers to plan even six months in advance. The vehicle makers, which have already made significant investment in the EV segment are now in the process of meeting different government departments to get more clarity on the issue before making any further move.

The inconsistency in the policies is not good for the automotive sector, which contributes around 7.1% to total GDP of the nation and employs about 32 million people, directly and indirectly.