Mapping India’s Energy Subsidies 2020

The report finds that while India has shifted resources toward clean energy since FY 2014, subsidies for fossil fuels remain over seven times larger than those for renewables and electric vehicles. Oil and gas subsidies rose by over 65% between FY 2017 and FY 2019, driven by higher oil prices and LPG use, while renewable energy subsidies fell by 35% in the same period. Electricity transmission and distribution subsidies doubled, primarily due to under-priced electricity for residential and agricultural users. Electric vehicle subsidies grew over 400-fold since FY 2014. A special analysis of coal indicates a massive net cost of INR 3,36,446 crore in FY 2018 when accounting for social costs like air pollution and GHG emissions, far outweighing tax revenues and charges.

• Between FY 2017 and FY 2019, oil and gas subsidies increased by over 65%, rising from INR 40,762 crore (USD 6.1 billion) to INR 67,679 crore (USD 10.07 billion), primarily due to higher oil prices and increased use of subsidized liquefied petroleum gas (LPG).
• Renewable energy (RE) subsidies decreased by 35% from a peak of INR 15,313 crore (USD 2.3 billion) in FY 2017 to INR 9,930 crore (USD 1.5 billion) in FY 2019, attributed to falling RE costs and policy decisions such as price caps in auctions and the solar safeguard duty.
• Subsidies for electric vehicles (EVs) grew more than 400-fold from FY 2014 to FY 2019, increasing from INR 3.8 crore (USD 0.6 million) to INR 1,673 crore (USD 249 million).
• Electricity transmission and distribution (T&D) subsidies doubled between FY 2014 and FY 2019, reaching INR 79,671 crore (USD 11.9 billion). The most significant component is the under-pricing of electricity, estimated at INR 63,778 crore (USD 9.5 billion).
• Despite a general shift toward clean energy since FY 2014, fossil fuel subsidies (oil, gas, and coal) remained significantly higher than clean energy support, totaling INR 83,134 crore (USD 12.4 billion) in FY 2019 compared to INR 11,604 crore (USD 1.7 billion) for renewables and electric mobility.
• Quantified coal subsidies remained stable from FY 2014 to FY 2019, ending at INR 15,456 crore (USD 2.3 billion) in FY 2019. The largest single coal subsidy is a concessional 5% sales tax under the GST, which forewent INR 13,681 crore (USD 2.0 billion) in revenue in FY 2019.
• A comprehensive cost assessment for FY 2018 reveals that coal-fired power results in a net overall cost to India of INR 3,36,446 crore (USD 52.2 billion), as social costs from air pollution and GHG emissions (estimated at INR 3,91,128 crore) far exceed tax revenues and charges.
• LPG subsidies are a major expenditure, with the Direct Benefit Transfer for LPG (DBTL) worth INR 31,447 crore (USD 4.7 billion) in FY 2019. However, evidence suggests these subsidies are poorly targeted, with a significant portion benefiting higher-income households.

APA

Garg, V., Viswanathan, B., Narayanaswamy, D., Beaton, C., Ganesan, K., Sharma, S., & Bridle, R. (2020). Mapping India’s Energy Subsidies 2020. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/india-energy-transition-2020.pdf

Chicago

Garg, Vibhuti, Balasubramanian Viswanathan, Danwant Narayanaswamy, Christopher Beaton, Karthik Ganesan, Shruti Sharma, and Richard Bridle. Mapping India’s Energy Subsidies 2020. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/publications/india-energy-transition-2020.pdf.

Wikipedia

{{cite report |last1=Garg |first1=Vibhuti |last2=Viswanathan |first2=Balasubramanian |last3=Narayanaswamy |first3=Danwant |last4=Beaton |first4=Christopher |last5=Ganesan |first5=Karthik |last6=Sharma |first6=Shruti |last7=Bridle |first7=Richard |title=Mapping India’s Energy Subsidies 2020 |publisher=International Institute for Sustainable Development |date=April 2020 |url=https://www.iisd.org/system/files/publications/india-energy-transition-2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{garg2020mapping, author = {Garg, Vibhuti and Viswanathan, Balasubramanian and Narayanaswamy, Danwant and Beaton, Christopher and Ganesan, Karthik and Sharma, Shruti and Bridle, Richard}, title = {{Mapping India’s Energy Subsidies 2020}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = apr, url = {https://www.iisd.org/system/files/publications/india-energy-transition-2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }