The Department of Expenditure, under the central government’s Ministry of Finance, has issued new guidance for the purchase and hiring of official staff cars. In addition to revising the existing price ceilings, electric cars have now been made all but mandatory. The instructions have come into force with immediate effect.
All ministries and departments have been ordered to treat electric cars as the default, both for new procurements and for replacing existing cars of any type that are due to be scrapped or decommissioned.
If for any reason an EV is deemed unsuitable for some official purpose, the procuring authority may still request an ICE model, but must submit an application justifying its need to the Department of Expenditure. Exceptions may be granted on a case-by-case basis, with due approval from the Secretary of the concerned ministry or department as well as its financial advisers. The same rule will apply when requesting a hired ICE vehicle.
In its circular dated November 10, the Department of Expenditure cites a need to encourage electric mobility and reduce dependence on fossil fuels. This aligns with the government’s “atmanirbhar Bharat” messaging, promotion of EVs through various incentives and schemes, promotion of EV manufacturing and charging infrastructure, and efforts to cut down on importing fuel by blending Ethanol into petrol.
Additionally, as per the new instructions, all government ministries and departments under them may pay up to ₹20,00,000 per electric vehicle or ₹10,00,000 per petrol, diesel, or hybrid vehicle (net dealer price). This means anyone who chooses to buy an ICE vehicle will be limited to lower-cost models. Interestingly, hybrids have been grouped with ICE cars. There is no separate consideration for CNG or flex fuel vehicles. These budget adjustments have been made to account for current-day market prices and vehicle lifecycle costs.
The department also issued revised guidelines for acquiring official laptops and similar devices for government officials on the same date.
