The Union Finance Ministry has made electric vehicles the preferred option for official staff cars across central government ministries and departments. In a major policy shift, the centre mandates EVs for Staff Cars whenever existing conventional vehicles are condemned or due for replacement, while doubling the electric-car procurement ceiling to ₹20 lakh.
Issued by the Department of Expenditure on November 10, 2026, the revised rules take immediate effect and modify the September 2022 guidelines. Petrol, diesel and hybrid cars are not banned, but their purchase will require justification and approval. The move will reshape future government fleet purchases for central services.
What Has Changed?
Departments should ordinarily choose an EV when replacing a staff car. The NDP ceiling is ₹20 lakh for electric cars and ₹10 lakh for petrol, diesel or hybrid cars. Other purchases need case-by-case approval.
EVs Become the Default Choice
Under the new Office Memorandum, ministries and departments are advised to procure electric vehicles when an existing conventional staff car is condemned or due for replacement. The directive makes EVs the normal procurement preference; it does not order an immediate removal of every petrol or diesel vehicle.
The change will take effect as older cars are replaced and applies to government staff-car procurement, not private owners.
New Price Limits: EV Cap Doubles
The NDP ceilings are:
- Electric cars: Up to ₹20 lakh.
- Petrol, diesel and hybrid cars: Up to ₹10 lakh.
- Earlier limit: The September 2022 guidelines set a general NDP ceiling of ₹6 lakh.
The cap expands model choices. Hybrids remain grouped with petrol and diesel cars, not EVs.
Petrol and Diesel Cars Need Special Approval
Conventional vehicles remain permitted when an EV is impractical for a specific operational requirement. Departments must submit a justified proposal, obtain clearance from the Administrative Ministry Secretary and concurrence from the Financial Adviser, then seek case-by-case approval from the Department of Expenditure.
An internal combustion engine (ICE) vehicle therefore needs documented operational reasons. This approval process allows exceptions where vehicle range, charging access or duty requirements make an EV unsuitable.
Existing Procurement Rules Remain
The 2022 instruction to prioritize hiring electric vehicles remains active wherever practical nationwide. All purchases must also follow the General Financial Rules (GFR), 2017. The memorandum changes preferences and price ceilings, not wider procurement rules. Departments must continue observing the applicable public-spending safeguards.
Why the Centre Is Pushing EVs
The Finance Ministry aims to accelerate electric mobility, reduce fossil-fuel dependence and account for EVs’ lower lifecycle costs and prevailing prices. The higher ceiling encourages departments to consider suitable electric models. Centre Mandates EVs for Staff Cars with a financial preference for fully electric vehicles.
A Policy Signal, Not an Overnight Ban
Implementation follows replacement cycles. Approved exceptions remain possible. Centre Mandates EVs for Staff Cars marks a procurement shift: fully electric cars are now the preferred choice, while petrol, diesel and hybrid options need a documented reason across government fleets nationwide.
Related Articles:
