Mapping India’s Energy Policy 2022

The report finds that India's energy budgeting remains heavily skewed toward fossil fuels, with subsidies for coal, oil, and gas being nine times larger than those for clean energy in FY 2021. While fossil fuel subsidies have fallen 72% since 2014, public sector undertakings (PSUs) and public finance institutions (PFIs) continue to provide substantial support to fossil projects, often lacking clear net-zero roadmaps. The analysis reveals a stark gap between revenue and social costs: conservative externalities for fossil fuels in FY 2020 (INR 1,441,464 crore) were more than double the revenues generated (INR 6,52,564 crore). The authors recommend phasing out fossil fuel support, diversifying PSU investments, and using strategic taxation to fund a just transition and clean energy infrastructure.

• Public support for the energy sector is substantial, exceeding INR 540,000 crore (USD 77 billion) annually, but remains misaligned with net-zero goals. In FY 2021, subsidies for coal, oil, and gas were nine times larger than those for clean energy, although fossil fuel subsidies have decreased by 72% since 2014.
• Electricity transmission and distribution (T&D) subsidies are the largest component of energy subsidies, reaching an all-time high of INR 1,41,895 crore in FY 2021. Approximately 94% of these are state government transfers to enable low-priced electricity for residential and agricultural users, which the report notes is poorly targeted.
• Public Sector Undertakings (PSUs) continue to prioritize fossil fuels over renewables. In FY 2020, the seven Maharatna-level PSUs invested over 11 times more in fossil projects than in clean energy. While some PSUs have announced new clean energy targets, most lack clear investment levels or institutionalized net-zero visions.
• Public Finance Institutions (PFIs) show a significant gap in clean energy lending. As of March 2021, outstanding credit for clean energy among 15 studied PFIs was only 6.7% (INR 85,139 crore) of total energy-related credit. Public sector banks (PSBs) had an even lower share at 4.3%.
• PFIs face significant financial risks from fossil fuel exposure. Gross credit risk exposure for 12 PSBs in 'energy infrastructure' was INR 5,02,134 crore in FY 2021. Specifically, the State Bank of India (SBI) saw its exposure to coal mining projects increase nearly four times from FY 2019.
• Energy revenues for central, state, and UT governments totaled INR 699,565 crore in FY 2020, with oil and gas contributing 83%. The report estimates that fossil energy revenue could grow by an additional INR 30,000 to INR 340,000 crore by 2030, though this will be volatile as the transition progresses.
• The social externalities of fossil fuels far outweigh the government revenues they generate. In FY 2020, conservative externalities for fossil fuels were estimated at INR 1,441,464 crore, more than double the fossil fuel revenues of INR 6,52,564 crore. Coal externalities were particularly high, estimated at 11 times its revenues.
• Renewable energy subsidies have declined by 59% since FY 2017 due to cost parity and falling installations. However, the government has introduced new Production-Linked Incentive (PLI) schemes for high-efficiency solar PV modules and advanced chemistry cell (ACC) battery storage with a cumulative budgeted outlay of INR 22,600 crore over 5 years.

APA

Aggarwal, P., Goel, S., Laan, T., Mehta, T., Pant, A., Raizada, S., Viswanathan, B., Viswamohanan, A., Beaton, C., & Ganesan, K. (2022). Mapping India’s Energy Policy 2022. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-05/mapping-india-energy-policy-2022.pdf

Chicago

Aggarwal, Prateek, Siddharth Goel, Tara Laan, Tarun Mehta, Aditya Pant, Swasti Raizada, Balasubramanian Viswanathan, et al. Mapping India’s Energy Policy 2022. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-05/mapping-india-energy-policy-2022.pdf.

Wikipedia

{{cite report |last1=Aggarwal |first1=Prateek |last2=Goel |first2=Siddharth |last3=Laan |first3=Tara |last4=Mehta |first4=Tarun |last5=Pant |first5=Aditya |last6=Raizada |first6=Swasti |last7=Viswanathan |first7=Balasubramanian |last8=Viswamohanan |first8=Anjali |last9=Beaton |first9=Christopher |display-authors=etal |title=Mapping India’s Energy Policy 2022 |publisher=International Institute for Sustainable Development |date=May 2022 |url=https://www.iisd.org/system/files/2022-05/mapping-india-energy-policy-2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aggarwal2022mapping, author = {Aggarwal, Prateek and Goel, Siddharth and Laan, Tara and Mehta, Tarun and Pant, Aditya and Raizada, Swasti and Viswanathan, Balasubramanian and Viswamohanan, Anjali and Beaton, Christopher and Ganesan, Karthik}, title = {{Mapping India’s Energy Policy 2022}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = may, url = {https://www.iisd.org/system/files/2022-05/mapping-india-energy-policy-2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }