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

The report finds that total quantified energy subsidies in India declined from INR 2,15,974 crore in FY2014 to INR 1,51,484 crore in FY2017. While support for renewables grew nearly six-fold and oil and gas subsidies dropped by 76%, subsidies for fossil fuels remained more than triple those for renewables and electric vehicles in FY2017. Electricity transmission and distribution emerged as the largest subsidy recipient, largely due to under-pricing for consumers. The document highlights the challenge of poor targeting in energy access subsidies and the stability of coal subsidies despite environmental externalities.

• Total quantified energy subsidies in India decreased from INR 2,15,974 crore (USD 35.7 billion) in FY2014 to INR 1,51,484 crore (USD 23.0 billion) in FY2017.
• Electricity transmission and distribution (T&D) became the largest single recipient of energy subsidies, reaching INR 83,313 crore (USD 12.9 billion) in FY2017, primarily through the under-pricing of electricity for certain consumer groups.
• Subsidies for oil and gas saw a significant reduction of 76 per cent between FY2014 and FY2017, falling from INR 1,57,678 crore (USD 26.1 billion) to INR 36,991 crore (USD 5.5 billion).
• Government support for renewable energy increased almost six-fold, rising from INR 2,608 crore (USD 431 million) in FY2014 to INR 15,040 crore (USD 2.2 billion) in FY2017.
• Despite the growth in renewable support, subsidies for oil, gas, and coal in FY2017 (INR 52,983 crore) were more than triple the value of subsidies for renewables and electric vehicles (INR 15,188 crore).
• Quantified subsidies for coal mining and coal-fired power remained stable between FY2014 and FY2017, totaling INR 15,992 crore (USD 2.4 billion) in FY2017.
• Subsidies for electric vehicles are growing but remain small, totaling INR 148 crore (USD 22.1 million) in FY2017, with the FAME scheme being the largest contributor at INR 144 crore.
• Direct energy access subsidies, which reduce consumer prices for electricity and clean cooking, accounted for 72 per cent of all quantified FY2017 subsidies, totaling INR 109,618 crore (USD 16.3 billion).
• The introduction of the Goods and Services Tax (GST) in July 2017 altered several energy subsidies, including reducing the sales tax rate on coal to 5 per cent and introducing a 5 per cent tax on renewable energy equipment.

APA

Soman, A., Gerasimchuk, I., Beaton, C., Kaur, H., Garg, V., & Ganesan, K. (2018). India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Update. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/india-energy-transition-2018update.pdf

Chicago

Soman, Abhinav, Ivetta Gerasimchuk, Christopher Beaton, Harsimran Kaur, Vibhuti Garg, and Karthik Ganesan. India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Update. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/india-energy-transition-2018update.pdf.

Wikipedia

{{cite report |last1=Soman |first1=Abhinav |last2=Gerasimchuk |first2=Ivetta |last3=Beaton |first3=Christopher |last4=Kaur |first4=Harsimran |last5=Garg |first5=Vibhuti |last6=Ganesan |first6=Karthik |title=India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Update |publisher=International Institute for Sustainable Development |date=December 2018 |url=https://www.iisd.org/system/files/publications/india-energy-transition-2018update.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{soman2018indias, author = {Soman, Abhinav and Gerasimchuk, Ivetta and Beaton, Christopher and Kaur, Harsimran and Garg, Vibhuti and Ganesan, Karthik}, title = {{India’s Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Update}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = dec, url = {https://www.iisd.org/system/files/publications/india-energy-transition-2018update.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }