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IPW: India's Budget - US funds electric vehicle charging

15 February 2022

Indian Budget banks on infrastructure for economic growth and US unveils $5bn to help states create EV charging network, in this week's Infrastructure Policy Watch.

IPW: India's Budget - US funds electric vehicle charging
India joins other countries in its economic recovery from the pandemic, placing a big bet on infrastructure investment for economic growth. Image credit: India's Ministry of Finance

In this fortnightly blog, ICE's Director of Policy Chris Richards looks at developing policy landscape for infrastructure, what decisions mean, and their implications, so that infrastructure professionals can play their part in shaping the discussion.

India's Union Budget leans on infrastructure investment for growth

India's 2022-23 Union Budget, delivered by minister of finance, Nirmala Sitharaman, reinforced the role of infrastructure development in recovering from the economic effects of the pandemic.

Main highlights from the budget were:

  • A 35% increase in capital expenditure taking the total for capital investment to 7.5 trillion rupees. The increase will be allocated to transport, energy, affordable housing and communications.
  • Specific initiatives include a highway expansion plan, new energy-efficient rolling stock and plans for 8 million houses in rural and urban areas.
  • Confirmation that the National Bank for Financing Infrastructure and Development announced in last year’s budget have both begun operation.
  • Reaffirming PM Gati Shakti, a new approach to multi-modal planning, as a core part of future investment decision making.
  • A focus on capacity building in planning, design, financing and implementation across central government departments, state governments and infrastructure agencies. This will be supported by the Capacity Building Commission.
  • The inclusion of data centres and energy storage systems within the definition of 'infrastructure' for finance and investment purposes.

ICE's view

India joins other countries in its economic recovery from the pandemic and has placed a big bet on infrastructure investment for economic growth.

Positive signs include the continued focus on a multi-modal approach to infrastructure planning. Many other countries can learn from efforts to improve capacity building and the definition of economic infrastructure.

However, there was little in the budget speech about aligning that investment to carbon reduction post-COP26.

US unveils billions for EV charging rollout

Following the recent Infrastructure Investment and Jobs Act, the US Federal Departments for Energy and Transport recently announced a new National Electric Vehicle Infrastructure (NEVI) Formula Programme to help states create an electric vehicle (EV) charging network.

The programme will provide $5bn over five years in grant funding to states to develop charging stations alongside designated 'Alternative Fuel Corridors', typically as part of the national Interstate Highway.

A new Joint Office of Energy and Transportation has also been launched to support the "deployment of zero-emission, convenient, accessible, equitable transportation infrastructure".

NEVI funds will be allocated as a formula grant. However, later this year, a "competitive grant program designed to further increase EV charging access in locations throughout the country, including in rural and underserved communities, will be announced".

ICE's view

Aside from the funding, the most notable shift is the creation of a Joint Office of Energy and Transportation. The net zero transition is about rewiring economies and will need cross-departmental working to drive change.

In the UK, similar measures were taken with the set up of the Office for Low Emission Vehicles (now Zero-Emission Vehicles), which aimed to bring together funding, guidance and regulation to remove blockers and enable electric vehicle adoption.

The US Alternative Fuel Corridors has been in development for some time, and the electric vehicle component of the Corridor is a patchwork primarily concentrated north to south on both east and west coasts. Hopefully, this announcement will help to fill in the gap.

While funding has been allocated as a block, states have to submit plans in advance. It shouldn't be assumed that all will do so, or that they will all spend their allocations. There needs to be a mechanism to ensure funding can be reallocated to other states so that the $5bn is put to good effect.

In case you missed it...

Check back in a fortnight for the next edition of the ICE's Infrastructure Policy Watch. You can also sign up to ICE Informs to get a monthly digest of the latest policy activities from ICE, including calls for evidence to support our ongoing advice to policymakers.

  • Chris Richards, director of policy at Institution of Civil Engineers