Assessing Fiscal Trade-Off in Uttar Pradesh's Shift Towards Electric Mobility

Santosh Kumar Shukla , Dr. Kanupriya Dubey

E-Vehicle, FAME, VAHAN, Government Policy

The fast pace of electric cars (EVs) adoption in India is an important move towards sustainability. The increasing popularity of EVs in Uttar Pradesh is linked to incentives by both the state and central government (e.g., road tax exemption, waived registration fees, etc.) as part of schemes like Faster Adoption and Manufacturing of Electric Vehicles (FAME) India. As the proportion of EVs and government subsidies in the form of incentives and tax exemptions increases with a goal towards ensuring sustainable mobility, it has an impact on the fiscal state of the state and EVs acceptance among various categories of vehicles. In this paper, we will look into two areas of the EV transition in Uttar Pradesh: how much fiscal spending can be estimated based on the amount of EV-related subsidies and tax exemptions, and which of the segments of EVs are being most impacted by the incentives provided. The study estimates the direct costs incurred by the state in terms of financial incentives by using secondary data on the FAME India dashboard, VAHAN vehicle registration portal, and the UP Budget documents. Fiscal spending to encourage EV adoption is calculated with the help of a formula that is determined by the policy guidelines. The findings suggest that even with continued provisioning of EV subsidies and exemption from road tax, state governments still have a lower impact on fiscal revenue due to factors such as lower adoption of EVs, the amount of subsidy allotted to different segments of EVs, and road tax exemption provisioned as per policy. The results highlight the significance of the balance between environmental aspirations and financial stability and indicate that a gradual and data-driven method should be used to encourage the electrification of mobility in Uttar Pradesh.

Volume 14 Issue 4, April-2026

Pages : i350-i358