Finance Ministry Mandates Electric Vehicles as Default Choice for Central Government Staff Cars

The Ministry of Finance has announced that electric vehicles (EVs) will serve as the default and preferred choice for staff car purchases across Central Ministries and Departments. According to an office memorandum issued by the Expenditure Department, ministries and departments will ordinarily procure EVs when replacing or condemning their existing internal combustion engine (ICE) staff cars that run on fossil fuels such as petrol, diesel, or natural gas.

Under the new guidelines, any ministry or department that deems EV procurement impractical and wishes to purchase an ICE vehicle must submit a duly justified proposal to the Department of Expenditure for approval. Such requests require the concurrence of the Financial Adviser and the approval of the Secretary of the administrative ministry or department.

To support electric mobility and account for vehicle lifecycle costs and market prices, the Finance Ministry has revised the Net Dealer Price (NDP) ceiling for vehicle procurement. The NDP ceiling for EVs has been set at ₹20 lakh, while the limit for ICE vehicles, including petrol, diesel, and hybrids, is capped at ₹10 lakh. Previous instructions issued in 2022 had established an NDP ceiling of ₹6 lakh for vehicle procurement and hiring.

In a separate office memorandum issued on the same date, the ministry updated guidelines regarding the purchase of laptops and similar devices for central government employees. Officers of the rank of Section Officer and above are eligible for devices such as laptops, tablets, notepads, ultra-books, and notebooks to discharge official work. These updated guidelines replace previous instructions issued in July 2023.

The revised laptop policy sets a price ceiling of ₹1.50 lakh plus taxes for standard devices. However, for devices featuring a Make-in-India component exceeding 40 percent, the price ceiling is extended to ₹1.80 lakh plus taxes, inclusive of standard software costs. Under the updated eligibility criteria, all government officers in Pay Level 12 and above are eligible for the devices, while departments can extend eligibility to 50 percent of officers in Pay Levels 8 to 11.

"The government's decision to mandate electric vehicles as the default choice for staff cars is a significant step toward institutionalizing clean mobility in public administration. By setting a higher Net Dealer Price ceiling for EVs compared to internal combustion engine vehicles, the policy addresses cost realities while actively building a predictable institutional market for electric vehicles. For businesses and manufacturers operating in the clean energy and EV ecosystem, such policy consistency provides long-term demand visibility and encourages sustainable growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes