- Harshil Agrawal
Just a year ago in 2019 while inaugurating the 53rd annual meeting of “The Federation of Nepal Chamber of Commerce” our honourable Prime Minister K.P.Sharma Oli made a request to the business to start investing in electric vehicles with promise of help from the government. He also mentioned that soon Nepal will enter the production line of these vehicles and will setup a factory for electronic vehicles. In the same year, tax on electric vehicles were 10% custody tax,13% vat and 4% road charge. Now in this fiscal year taxes have been raised to 80% custody tax and to worsen the matter they have introduced 40-80% of excised duty, VAT 13% and 5% road charge.
So, after his remarks, those who have invested in this field are severely affected by our own government. If government policy is dysfunctional, how can people in the country improve their living standards? Now as we have talked about living standards. So let’s consider the case of Norway, where the living standard is one of the highest in terms of human development index. Norway is also among top oil producers with one of the highest per capita oil productions. Despite all this, their aim is to supplant all petrol-powered vehicles by 2025 with electrical ones.
In an interview by Johnny of vox news, he asked one Norwegian – isn’t it irony that Norway is selling oils to other countries while itself staying greener and adopting electronic vehicles. To this, the interviewee replied, “The world needs oil. There are many countries that are in developing phase like China, India, Brazil, among many others. And there is always the need of energy, and we would argue that we extract that more efficiently than other countries. The title of the video is- ‘Why Norway is full of Teslas’.
Nepal is also in a developing phase and nature has provided us ample of water resources. We have a huge potential for hydroelectricity generation, but our government policies haven’t yet capitalized upon the potential.
Nepal is running in a trade deficit. We’ve a debt equivalent to 30.20 percent of the country’s Gross Domestic Product in 2019. India and Nepal had a Joint Working Group meeting on August 13 2020 during which the two sides discussed future areas of cooperation in the petroleum energy sector, including possibilities of new pipelines for supply of petroleum products to Nepal. Yet we need to shift from petroleum cars to electronic vehicles, eventually. According to the Department of Customs, during the fiscal year 2018/2019, Nepal imported petrol and diesel of worth Rs155.43 billion, an increase of more than Rs30 billion from the fiscal year of 2017/2018, as of this year though it may decrease or remain same but for future this growth seems higher and we can’t afford to lose so much money to foreign countries in the long run.
Greater adoption of EVs will not only help combat pollution but also help the country reduce its reliance on imported petrol and diesel, both of which are major contributors to our depleting foreign reserves. This problem can be tackled by incentivizing and motivating people to take adopt electronic vehicles. Undertaking new hydroelectricity projects can go alongside with the adoption of electric vehicles. Here, the private sectors can step in to set up electrical charging booths in hotels and restaurants. Government can subsidize those sectors to incentivize the process. Initially, it might meet with some resistance, both on supply and demand side. Yet, this is hugely beneficial to the environment and to the economy in the long run.