Electric Bikes and Rickshaw Leases With No Markup
Financial assistance for electric bikes and rickshaws up to Rs. 0.5 million will be provided at no extra cost with a three-year repayment period.
The federal government on Thursday authorised a discounted electric bike and rickshaw system through the Prime Minister’s Youth Programme at a starting projected cost of roughly Rs7.5 billion in response to concerns over the suggested fuel assistance scheme before the elections.
The choice was made at an assembly of the Economic Coordination Committee (ECC) of the Cabinet, which also accepted the sale of over 20,000 tonnes of sugar in Punjab at a regulated price of Rs95 per kg in response to a spike in retail costs adhering to the approval of exports and a guarantee of financing of about Rs15 billion to Pakistan International Airlines (PIA).
The declaration of Customs Station Angoor Adda as an acceptable trade land path to Afghanistan and from Afghanistan to central Asian republics was also approved at the conference headed over by Finance Minister Ishaq Dar.
The ECC authorised a financing arrangement through the PM’s Youth Business & Agriculture Loan Scheme (PMYB&ALs) to bolster consumer interest in electric bikes and electric rickshaws on an overview submitted by the Ministry of Industries and Production.
To make electric bikes more accessible to riders, the programme offers a system of rewards.
The Ministry of Finance rejected it due to budgetary concerns, thus the ECC wasn’t on board with any of the three proposals that called for the government to pay for fifty per cent of the price of the electric bikes and rickshaws using commercial bank lending at an interest rate of around 21%.
It authorised a plan under which a clean loan of up to Rs. 0.5 million will be provided within Tier-I (T1) of PMYB&ALS at a zero markup rate with a three-year payback period. In the current financial year, this site will be able to accommodate up to 15,000 electric bikes and rickshaws, and it will be expanded to 60,000 in 2023–2024 and 100,000 in 2024–25.
As a result, the program’s subsidy would be roughly Rs1.5 billion this year, Rs6 billion the following year, and Rs10 billion in 2024–25.
The standard cost of an electric bike with a lithium battery and particular requirements, as anticipated by the engineering development board and the Ministry of Industries, is Rs. 190,000, which is excessive for the widespread use of electric vehicles.
PM’s Youth Programme, the State Bank of Pakistan, the Bank of Punjab, and the National Rural Support Programme would be significant participants in the project even if the scheme’s finer points have yet to be decided.
Following the Auto Industry Development & Export Policy 2021-26, the government has already permitted the shipment of EV-specific parts at a 1 per cent customs fee and 1 per cent sales tax. It has set an EV integration target of 50 per cent by 2026.
On the highways, there are more than 2 million motorbikes annually, of which more than 2 million are domestically produced and anticipated to use nearly $3 billion in fuel annually. On the other hand, the government granted 22 production licences to Electric bike producers, and the total number of Electric bikes produced between 2021 and 2022 was 7377.
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