The Central Government has introduced new rules to encourage the use of electric vehicles (EVs) in government offices. Under the revised guidelines, electric cars will become the first choice for official vehicles used by central government ministries and departments.
The government has also increased the purchase price limit for electric cars to ₹20 lakh, while keeping the limit for petrol, diesel and hybrid vehicles at ₹10 lakh.
The new rules came into effect on November 10, 2026.
Electric Cars to Replace Petrol and Diesel Vehicles
According to the Ministry of Finance, central government departments should choose electric cars when replacing their existing petrol or diesel vehicles.
The decision aims to increase the use of electric vehicles, reduce fuel consumption and support cleaner transportation.
However, the government has not completely banned petrol, diesel or hybrid vehicles.
Departments can still purchase conventional vehicles if electric cars are not suitable for their needs.
Government Sets ₹20 Lakh Limit for Electric Cars
The Department of Expenditure has fixed different purchase limits for electric and conventional vehicles.
Government departments can purchase electric staff cars with a maximum net dealer price of ₹20 lakh.
For petrol, diesel and hybrid vehicles, the limit remains ₹10 lakh.
The higher limit for electric cars is intended to give departments more options when choosing vehicles.
The government said the revised limits consider current vehicle prices and long-term operating costs.
Special Approval Needed for Petrol and Diesel Cars
Government departments that want to purchase petrol, diesel or hybrid cars must now provide a valid reason.
They must explain why an electric vehicle cannot meet their requirements.
The request must be approved by the secretary of the concerned ministry or department and supported by its financial adviser.
Final permission must be obtained from the Department of Expenditure.
This rule is intended to make electric vehicles the normal choice for official transport.
New Rules Also Apply to Hired Vehicles
The government’s preference for electric vehicles also applies to cars hired for official use.
Departments are expected to hire electric vehicles whenever possible.
If they need petrol, diesel or hybrid vehicles, they must follow the same special approval process.
Other government vehicle purchase and hiring rules will remain unchanged.
No ₹20 Lakh Benefit for Government Employees
The new ₹20 lakh limit does not mean government employees will receive money to buy electric cars.
It is only the maximum permitted dealer price for official vehicles purchased by government departments.
The decision does not introduce any personal car allowance, vehicle loan or electric vehicle subsidy for employees.
It is also unrelated to the 8th Central Pay Commission.
Government Aims to Promote Electric Mobility
The new policy is part of India’s efforts to encourage electric mobility and reduce dependence on petrol and diesel.
By making electric cars the preferred option for government use, the Centre hopes to increase EV adoption across its departments.
The move could also create more demand for electric cars and support the country’s growing electric vehicle industry.
