Major Updates: EV Subsidies Extended, LPG Refill Policy Revised – What You Need to Know
Stay informed on the latest government subsidy schemes shaping India's mobility and energy landscape. The PM E-DRIVE scheme for electric vehicles sees crucial extensions, providing a significant boost for green transportation, while the Pradhan Mantri Ujjwala Yojana's (PMUY) LPG refill policy undergoes important revisions, directly impacting millions of households. These updates reflect the government's dynamic approach to fostering sustainable development and ensuring essential services remain accessible.
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EV Subsidy Updates: PM E-DRIVE Extends Support
The landscape of electric vehicle (EV) subsidies in India has seen significant evolution, transitioning from the FAME II scheme to the more comprehensive PM E-DRIVE program. The Faster Adoption and Manufacturing of Electric Vehicles in India (FAME II) scheme, which played a crucial role in boosting early EV adoption, concluded on March 31, 2024. Following this, a transitional scheme, the Electric Mobility Promotion Scheme (EMPS) 2024, was introduced from April 1, 2024, to July 31, 2024, with an outlay of ₹500 crore, primarily targeting electric two-wheelers and three-wheelers.
The PM E-DRIVE Scheme
Now, the nation's primary central government incentive for electric vehicles is the PM E-DRIVE Scheme, which commenced after FAME II and EMPS 2024. This scheme boasts a substantial outlay of ₹10,900 crore and is designed to accelerate the adoption of electric two-wheelers (e-2W) and three-wheelers (e-3W) across the country.
- Extension of Subsidies: The PM E-DRIVE scheme has extended subsidies for electric two-wheelers until July 31, 2026. This provides continued financial incentives for buyers and supports demand visibility for manufacturers. For electric three-wheelers, including e-rickshaws and e-carts, the support has been stretched even further, until March 31, 2028. However, it's important to note that subsidies for L5 category electric three-wheelers concluded on December 26, 2025.
- Incentive Details: Under the scheme, electric two-wheelers are eligible for a demand incentive of ₹2,500 per kWh, capped at ₹5,000 per vehicle, provided their ex-factory price is up to ₹1.5 lakh. For eligible electric three-wheelers, incentives can go up to ₹25,000 for small vehicles and up to ₹50,000 for larger L5 category vehicles (though L5 subsidies have now ceased).
- Eligibility Criteria: To claim these EV incentives, buyers must possess a valid Aadhaar card, with subsidies limited to one electric two-wheeler per person. An Aadhaar-linked mobile number is also mandatory for verification. The eligible EV must be equipped with advanced batteries, such as lithium-ion, and be purchased from an approved OEM meeting local manufacturing norms.
- Additional Benefits: Beyond direct purchase incentives, consumers benefit from a direct 5% GST reduction on both the electric vehicle and home chargers, a significant drop compared to the 28% GST on standard petrol cars. Income tax benefits under Section 80EEB, allowing claims of up to ₹1.5 lakh per year on loan interest, are applicable for loans sanctioned between April 1, 2019, and March 31, 2023.
Delhi EV Policy 2026: A Regional Push for Green Mobility
Complementing the central government's efforts, the Delhi government has recently approved the comprehensive "New Delhi EV Policy 2026," which became effective on July 1, 2026. This policy aims to significantly curb vehicular pollution and accelerate the transition to clean transportation in the capital. You can find more information about public welfare initiatives, which might include details on local EV programs, by checking out this related post on Delhi Government's Public Welfare Camps.
- Tax Exemptions and Incentives: The policy offers a 100% exemption on road tax and registration fees for electric cars priced up to ₹3 million, valid until March 31, 2030. For electric two-wheelers, purchase subsidies are tiered: ₹30,000 in the first year, ₹20,000 in the second year, and ₹10,000 in the third year. Electric three-wheelers receive incentives of ₹50,000, ₹40,000, and ₹30,000 across the first three years, respectively.
- Scrapping Incentives: To encourage the replacement of older, polluting vehicles, the policy includes scrapping incentives ranging from ₹5,000 to ₹100,000. Specifically, ₹10,000 is offered for scrapping BS-IV or older two-wheelers, ₹25,000 for three-wheelers, and ₹50,000 for N1 trucks. Owners of BS-IV four-wheelers or below standard can receive ₹1 lakh as a scrapping incentive.
- Charging Infrastructure Development: The Delhi government plans to develop over 30,000 EV charging points across the capital to support this transition.
- Future Mandates: The policy introduces strict timelines for new vehicle registrations. From January 1, 2027, only electric auto-rickshaws and N1 goods carriers will be permitted for new registrations in Delhi. Further, from April 1, 2028, new registrations for petrol and CNG two-wheelers will be discontinued, making way for only electric models.
LPG Refill Policy Revisions: Focus on Ujjwala Yojana
Significant changes have also been implemented in the government's Liquefied Petroleum Gas (LPG) refill policies, particularly impacting beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY). These revisions aim to rationalize subsidies while ensuring continued support for economically weaker households.
Ujjwala Yojana: Key Changes and Continued Support
The PM Ujjwala Yojana continues to provide deposit-free LPG connections to eligible adult women from poor households, including the first refill and a hotplate/stove free of cost under Ujjwala 2.0. The targeted subsidy for PMUY beneficiaries currently stands at ₹300 per 14.2 kg cylinder.
- Revised Refill Limit: A major revision concerns the number of subsidized refills. Initially, Ujjwala beneficiaries were entitled to 12 subsidized 14.2 kg cylinders per year. This was reduced to 9 refills last year and has now been further lowered to 4 subsidized refills per year. This adjustment, according to the Ministry of Petroleum & Natural Gas, aligns with the average annual consumption patterns of Ujjwala beneficiaries, which typically range from four to five cylinders.
- Subsidy Mechanism: The ₹300 per cylinder subsidy is credited directly to the Aadhaar-linked bank account of the beneficiary through Direct Benefit Transfer (DBT) after each successful refill delivery. The continuation of this targeted subsidy for PMUY consumers for FY 2025-26 has been approved with an expenditure of ₹12,000 crore.
- Eligibility: Eligibility for PMUY benefits, including the refill subsidy, is restricted to adult women (18 years or older) from poor households who do not have an existing LPG connection in their family. Beneficiaries typically include those with BPL cards, SC/ST, PM Awas Yojana, MBC, AAY, forest dwellers, tea and ex-tea garden tribes, and residents of islands and river islands, and they must hold a savings account in a nationalized bank.
LPG Subsidy Eligibility and New Rules
Beyond the Ujjwala Yojana, the broader LPG subsidy scheme aims to make cooking gas more affordable for eligible households. Consumers typically purchase LPG cylinders at market price, with the subsidy amount later credited to their registered bank accounts.
- Income-Based Ineligibility: Households where either the consumer or their spouse has an annual taxable income exceeding ₹10 lakh are not eligible for the LPG subsidy. Oil marketing companies (OMCs) are now implementing stricter verification processes, integrating with Income Tax Department records to identify ineligible beneficiaries. Consumers who receive warning messages about exceeding this income limit are advised to respond within seven days to avoid potential cancellation of their benefits.
- "One Household, One Connection" Policy: Under the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Amendment Order, 2026, it is now mandatory for LPG customers to terminate their domestic LPG connection within 30 days of obtaining a Piped Natural Gas (PNG) connection. This policy is being strictly enforced in light of global energy dynamics and aims to ensure subsidized LPG reaches genuinely needy families in areas without PNG access.
- Supply Regulation Changes: Effective July 4, 2026, the Ministry of Petroleum and Natural Gas (MoPNG) issued the Natural Gas (Supply Regulation) (Amendment) Order 2026, officially ending government control over gas production and distribution. This change aims to ensure gas is available to all sectors without earlier restrictions.
Impact and Future Outlook
These government updates underscore a strategic shift towards targeted and efficient subsidy distribution. The extended EV subsidies under the PM E-DRIVE scheme, coupled with proactive state-level policies like Delhi's EV Policy 2026, are set to further accelerate the adoption of electric vehicles, especially in the two- and three-wheeler segments which are crucial for mass mobility. This continued support for green mobility is expected to contribute significantly to environmental goals and reduce reliance on fossil fuels.
For LPG consumers, the revisions to the Ujjwala Yojana's refill policy emphasize a move towards more realistic consumption patterns while maintaining the core objective of providing clean cooking fuel to the poor. The stricter income verification and the 'one household, one connection' policy reflect efforts to optimize subsidy allocation and prevent misuse. As global energy markets remain volatile, such targeted measures aim to balance affordability for beneficiaries with fiscal sustainability.