This report maps out the context, magnitude, trends and impacts of India’s energy subsidies.
India is the world’s third largest economy with a rapidly expanding population, which has caused substantial increases in energy demand. India’s government is seeking to expand electricity access to the 240 million people without grid electricity, in order to improve the quality of electricity supply and to boost per capita energy consumption. The role of energy subsidies is key to India’s energy development trajectory. It determines how India’s energy demand is met and creates critical choices for government policy-makers.
This report presents a comprehensive inventory of India’s energy subsidies to coal, oil and gas, electricity transmission and distribution, and renewable energy. It finds that the total value of energy subsidies decreased between 2014 and 2016, with the large majority of subsidies going to fossil fuels or the electricity distribution system. The research also shows that subsidies for renewable energy have more than tripled in the same period.
The aim of the study is to enhance transparency and dialogue on energy choices in India and assist in tracking shifts in government support from fossil fuels to renewables, in line with the country’s policy goals of increasing energy access and promoting low-carbon energy.