India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Annex Update

This document is an annex to the 2018 update of 'India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy'. It details changes in subsidy policies since 2017 and introduces new summary tables for subsidies related to the Goods and Services Tax (GST), the Saubhagya electrification scheme, and electric vehicles (EVs) at both central and state levels.

• Several fossil fuel subsidies were modified or discontinued between 2017 and 2018. A 100 per cent tax holiday for power generating companies that began operating after April 1, 1993, was discontinued in March 2017. Additionally, the tax holiday for companies producing mineral oil or refining oil was terminated for any blocks awarded or undertakings beginning refining after March 31, 2017.
• Multiple renewable energy support mechanisms were withdrawn or reduced. The Biomass Gasifier Programme and the Small Wind Energy and Hybrid Systems Programme both ended in 2017 without further extension. The Akshay Urja Shops Programme was discontinued on June 20, 2017. Furthermore, the accelerated depreciation rate for renewable energy was halved from 80 per cent to 40 per cent in Budget 2017, and the Generation-Based Incentive (GBI) for wind and solar projects was withdrawn in Budget 2017–18.
• The introduction of the Goods and Services Tax (GST) in July 2017 created new concessional tax regimes. Coal production attracts a 5 per cent GST rate, compared to 18 per cent for similar commodities. Domestic LPG and PDS kerosene also receive a lower GST rate of 5 per cent. For renewable energy, GST on selected machinery for solar and wind generation is set at 5 per cent. In FY18, the subsidy conferred via lower GST rates on renewable energy equipment was 24,667 INR crore (367.7 USD million).
• The Saubhagya scheme (Pradhan Mantri Sahaj Bijli Har Ghar Yojana) aims for universal household electrification. It targets 46 million households that remained unelectrified as of April 30, 2017. The project has a total outlay of 16,320 INR crore (2.5 billion USD), with Gross Budgetary Support of 12,320 INR crore (1.9 billion USD).
• Central government support for electric vehicles (EVs) includes the FAME-India scheme, which focuses on technology development, demand creation, pilot projects, and charging infrastructure through 2020. In FY18, FAME-India conferred 235 INR crore (36.46 USD million). Additionally, EVs are subject to a lower GST rate of 12 per cent compared to 28 per cent for fossil fuel vehicles, which provided a subsidy of 15.36 INR crore (2.3 USD million) in FY18 for four-wheelers.
• The State of Maharashtra implemented an EV policy (2018-2023) targeting 500,000 registered electric vehicles. The policy provides a 10 per cent subsidy on the base price for the first 1,000 EV passenger buses (capped at 0.2 INR crore per vehicle) and a 15 per cent subsidy for the first 100,000 EVs (capped at 5,000 INR for 2-wheelers, 12,000 INR for 3-wheelers, and 100,000 INR for 4-wheelers). It also offers a 25 per cent subsidy on equipment for the first 250 commercial public EV charging stations, capped at 0.1 INR crore per station.

APA

International Institute for Sustainable Development (n.d.). India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Annex Update. https://www.iisd.org/sites/default/files/publications/india-energy-transition-2018update-annex.pdf

Chicago

International Institute for Sustainable Development. India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Annex Update. n.d. https://www.iisd.org/sites/default/files/publications/india-energy-transition-2018update-annex.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Annex Update |url=https://www.iisd.org/sites/default/files/publications/india-energy-transition-2018update-annex.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndindias, author = {{International Institute for Sustainable Development}}, title = {{India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Annex Update}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/sites/default/files/publications/india-energy-transition-2018update-annex.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }