Re-Distributing Up: How fuel subsidy policy has short-changed Bihar

This research paper examines the structural inequality in the distribution of centrally financed fuel subsidies in India, arguing that Bihar, one of the country's poorest states, consistently receives the lowest per capita subsidy transfers compared to wealthier states.

• Bihar has consistently been the lowest per capita recipient of fuel subsidy transfers among all Indian states and union territories over the last decade. In the 2013/14 fiscal year (FY), Bihar's average per capita transfer was INR 602, significantly lower than Haryana (INR 2,556), Delhi (INR 1,967), and Punjab (INR 1,912).
• Specific fuel subsidies show extreme disparities: in FY 2013/14, Bihar's diesel subsidy transfer (INR 175 per capita) was less than 10% of Haryana's (INR 1,770 per capita). For LPG, Bihar received INR 170 per capita, which was less than a sixth of the transfer received by Delhi (INR 1,340 per person).
• Despite Bihar's status as the poorest state with low electricity and LPG access, its subsidized kerosene allocation (INR 257 per capita) was only roughly equal to the national average, while wealthier states like Gujarat received more (INR 371 per person).
• The scale of subsidy expenditure is massive, totaling INR 447,771 crore (USD 73.6 billion) for diesel, LPG, and kerosene between FY 2011/12 and FY 2013/14, which is over four times the budget for the National Rural Employment Generation Scheme (NREGS).
• To achieve parity in subsidy transfers for the three years ending March 2014, Bihar would have required massive compensatory transfers: INR 74,008 crore (USD 11.4 billion) to match Haryana, INR 42,087 crore (USD 6.5 billion) to match Delhi, and INR 28,371 crore (USD 4.3 billion) to match Gujarat.

APA

Clarke,, K. C. (2015). Re-Distributing Up: How fuel subsidy policy has short-changed Bihar. International Institute for Sustainable Development. https://www.iisd.org/articles/insight/re-distributing-how-fuel-subsidy-policy-has-short-changed-bihar

Chicago

Clarke,, Kieran Clarke,Kieran. Re-Distributing Up: How fuel subsidy policy has short-changed Bihar. International Institute for Sustainable Development, 2015. https://www.iisd.org/articles/insight/re-distributing-how-fuel-subsidy-policy-has-short-changed-bihar.

Wikipedia

{{cite report |last1=Clarke, |first1=Kieran Clarke,Kieran |title=Re-Distributing Up: How fuel subsidy policy has short-changed Bihar |publisher=International Institute for Sustainable Development |date=28 October 2015 |url=https://www.iisd.org/articles/insight/re-distributing-how-fuel-subsidy-policy-has-short-changed-bihar |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clarke2015redistributing, author = {Clarke,, Kieran Clarke,Kieran}, title = {{Re-Distributing Up: How fuel subsidy policy has short-changed Bihar}}, institution = {International Institute for Sustainable Development}, year = {2015}, month = oct, url = {https://www.iisd.org/articles/insight/re-distributing-how-fuel-subsidy-policy-has-short-changed-bihar}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }