India’s Energy Transition: Mapping subsidies to fossil fuels and clean energy in India

This executive summary report by the International Institute for Sustainable Development (IISD), in collaboration with ICF and the Overseas Development Institute (ODI), provides the first comprehensive inventory of energy subsidies in India for the financial years 2014 to 2016. The report maps subsidies across coal, oil and gas, renewable energy, and electricity transmission and distribution (T&D), analyzing their magnitude, trends, and socio-economic and environmental impacts.

• Total quantified energy subsidies from the central government decreased significantly between FY2014 and FY2016, falling from INR 216,408 crore (USD 35.8 billion) to INR 133,841 crore (USD 20.4 billion).
• Oil and gas subsidies saw a sharp decline from INR 157,678 crore (USD 26 billion) in FY2014 to INR 44,654 crore (USD 6.8 billion) in FY2016, driven by pricing reforms for gasoline and diesel and a drop in global oil prices.
• Subsidies for electricity transmission and distribution (T&D) increased from INR 40,331 crore (USD 6.7 billion) in FY2014 to INR 64,896 crore (USD 9.9 billion) in FY2016, becoming the primary recipient of energy subsidies. While theoretically neutral, these subsidies effectively benefit fossil fuels due to coal's dominance in power generation.
• Support for renewable energy grew substantially, with central government subsidies rising from INR 2,607 crore (USD 431 million) in FY2014 to INR 9,311 crore (USD 1.4 billion) in FY2016. By 2016, two-thirds of these subsidies were tax exemptions.
• Coal subsidies remained relatively stable, totaling INR 14,979 crore (USD 2.3 billion) in FY2016, with approximately 90 per cent provided through tax breaks and concessional duties.
• Energy subsidies in India often fail to reach the intended poor; for instance, it is estimated that 87 per cent of electricity subsidy payments are received by households above the poverty line.
• Fossil fuel and biomass energy contribute to severe air pollution, with health costs estimated at 3 per cent of India's GDP. Reforms to fossil fuel subsidies and taxation could potentially prevent 65 per cent of premature deaths caused by air pollution.

APA

Garg, V., Gerasimchuk, I., Beaton, C., Bandyopadhyay, K. R., Chugh, G., Gupta, A., Jain, A., Malhotra, R., Sodhi, G., Tripathi, S., Whitley, S., Worrall, L., Scott, A., & Patel, S. (2017). India’s Energy Transition: Mapping subsidies to fossil fuels and clean energy in India. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/india-energy-transition-summary.pdf

Chicago

Garg, Vibhuti, Ivetta Gerasimchuk, Christopher Beaton, Kaushik Ranjan Bandyopadhyay, Gurpreet Chugh, Ajit Gupta, Apurva Jain, et al. India’s Energy Transition: Mapping subsidies to fossil fuels and clean energy in India. International Institute for Sustainable Development, 2017. https://www.iisd.org/system/files/publications/india-energy-transition-summary.pdf.

Wikipedia

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BibTeX

@techreport{garg2017indias, author = {Garg, Vibhuti and Gerasimchuk, Ivetta and Beaton, Christopher and Bandyopadhyay, Kaushik Ranjan and Chugh, Gurpreet and Gupta, Ajit and Jain, Apurva and Malhotra, Ramit and Sodhi, Garima and Tripathi, Sagun and Whitley, Shelagh and Worrall, Leah and Scott, Andrew and Patel, Sejal}, title = {{India’s Energy Transition: Mapping subsidies to fossil fuels and clean energy in India}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = nov, url = {https://www.iisd.org/system/files/publications/india-energy-transition-summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }