India Energy Subsidy

The Indian government is implementing a series of reforms to reduce its petroleum subsidy bill, including daily price revisions for petrol and diesel and the gradual elimination of LPG and kerosene subsidies by March 2018. Simultaneously, the government is expanding electricity access through the Saubhagya scheme and restructuring distribution company debt via UDAY. There is also a proposal to integrate petroleum products into the unified Goods and Services Tax (GST) mechanism to simplify the current dual-taxation system.

• The Indian government intends to reduce its petroleum subsidy expenditure by more than 50% by 2019/20, projecting a decrease from INR 25,000 crore (USD 3,825 million) in 2017/18 to INR 10,000 crore (USD 1,530 million).
• To align retail prices with international crude oil prices and increase transparency, India introduced a policy in June 2017 allowing for the daily revision of petrol and diesel retail prices, replacing the previous fortnightly setting by oil marketing companies.
• The government is pursuing the elimination of subsidies for liquefied petroleum gas (LPG) and kerosene by March 2018 through gradual price increases. For LPG, this involves monthly price hikes of INR 4 per 14.2kg cylinder; for kerosene, monthly hikes of INR 0.5 per litre are used to bring prices closer to market rates and prevent diesel adulteration.
• The Saubhagya (Pradhan Mantri Sahaj Bijli Har Ghar Yojana) scheme, with an allocation of INR 16,320 crore (USD 2.5 billion), aims to achieve universal household electrification by December 2018 by subsidizing last-mile connectivity equipment such as meters, wires, and transformers.
• The Minister of Petroleum and Natural Gas has proposed moving petroleum products into the Goods and Services Tax (GST) mechanism to replace the current system where products are taxed twice: first by a central excise tax and then by a state-level value-added tax.

APA

International Institute for Sustainable Development (2017). India Energy Subsidy. https://www.iisd.org/system/files/publications/india-energy-subsidy-briefing-note-october-2017.pdf

Chicago

International Institute for Sustainable Development. India Energy Subsidy. 2017. https://www.iisd.org/system/files/publications/india-energy-subsidy-briefing-note-october-2017.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=India Energy Subsidy |date=October 2017 |url=https://www.iisd.org/system/files/publications/india-energy-subsidy-briefing-note-october-2017.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2017india, author = {{International Institute for Sustainable Development}}, title = {{India Energy Subsidy}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = oct, url = {https://www.iisd.org/system/files/publications/india-energy-subsidy-briefing-note-october-2017.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }