To allay fears in the automobile industry, which is going through an acute slowdown, Union Road Transport Minister Nitin Gadkari has refuted any government moves to ban petrol or diesel vehicles.

He said electric vehicles were gaining popularity on their own and there was no need to take such a step. However, he added that in two years all buses on the country’s roads will either be electric or run on eco-friendly fuel.

“I always talk about electric vehicles such as cars, bikes and buses. Now, it has started naturally. There is no need to make it mandatory,” Gadkari said at the National Conclave on Energy Efficiency in Micro, Small and Medium Enterprises in New Delhi, the Press Trust of India reported.

“There is no need to ban petrol and diesel vehicles. In the next two years, all buses would be electric and run on bio-ethanol and compressed natural gas.”

The minister said this would help cut costs and reduce pollution in cities. He also spoke about converting farm stubble left after harvests into clean fuel for generating electricity and running vehicles, which could boost the income of farmers.

At present, farmers burn the stubble, causing air and soil pollution. According to a study by Greenpeace on air pollution, 22 of the world’s 30 worst affected cities are in India, which also includes the country’s capital New Delhi.

Earlier, government think-tank Niti Aayog reportedly proposed that after 2030, only electric vehicles should be sold in India. The move upset the CEOs of various auto companies and later ministers in the Narendra Modi cabinet tried to allay their fears.

In a related development, a panel headed by Niti Aayog Chief Executive Officer Amitabh Kant suggested that for two-and-three-wheelers below 150cc in engine capacity, only electric versions should be permitted to be sold from 2025 onwards.

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Although these proposals made conventional auto manufacturers uncomfortable, experts said it will take many years for there to be a market for electric vehicles. The lack of infrastructure also poses a challenge to vehicles run on internal combustion engines.

According to the Society of Manufacturers of Electric Vehicles, in 2018-19 about 760,000 electric vehicles were sold in India. Three-wheelers accounted for the lion’s share of 630,000 units, followed by two-wheelers at 126,000, while a paltry 3,600 electric cars were sold during the period.

Electric cars continue to be prohibitively expensive and the number of charging stations is very low. The government has taken some steps to make them affordable. It announced a 7% cut in the goods and services tax for electric vehicles and sanctioned free registration for them.

However, the government has to keep in mind that promoting electric vehicles aggresively could lead to losses for oil companies, which in turn will affect its own exchequer.

India’s automobile industry is going through its worst slowdown due to a slowing economy and rising costs of vehicle ownership. According to the Society of Indian Automobile Manufacturers, 350,000 jobs have been lost and more than one million are at risk due to plant shutdowns and bankruptcies of dealers and component makers.