Mapping India’s Energy Subsidies 2021

The report finds that fossil fuel subsidies in India increased relative to clean energy in FY 2020, with electricity transmission and distribution (T&D) remaining the largest subsidy category. While electric vehicle (EV) subsidies grew, renewable energy support stagnated. The authors argue that India's energy PSUs remain heavily skewed toward fossil fuel investments and lack clear decarbonization roadmaps. The report recommends a 'second generation' of clean energy support focusing on storage, green hydrogen, and offshore wind, alongside reforms to DISCOM finances and a strategic shift in PSU capital expenditure.

• Fossil fuel subsidies increased relative to clean energy in FY 2020, with quantified subsidies for fossil fuels being 7.3 times higher than those for clean energy.
• Electricity transmission and distribution (T&D) represents the largest portion of energy subsidies, totaling INR 1.29 lakh crore (USD 18.2 billion) in FY 2020, with approximately 90% consisting of state government tariff subsidies for consumers.
• Subsidies for renewable energy have stagnated since FY 2017, falling 45% from a peak of INR 15,470 crore (USD 2.2 billion) to INR 8,577 crore (USD 1.2 billion) in FY 2020.
• Coal subsidies declined in real terms from FY 2014 to FY 2020, reaching INR 14,908 crore (USD 2.1 billion) in FY 2020, with concessional GST rates on coal sales serving as the primary support mechanism.
• Oil and gas subsidies reached INR 55,347 crore (USD 7.8 billion) in FY 2020, driven by high world oil prices and increased LPG consumption, though kerosene subsidies were successfully phased out by FY 2022.
• Subsidies for electric vehicles (EVs) grew more than 2.3 times since FY 2019, totaling INR 1,141 crore (USD 161 million) in FY 2020, primarily supported by the FAME scheme and concessional GST rates.
• Investment by the seven major energy-related Maharatna PSUs remains heavily skewed toward fossil fuels; in FY 2020, fossil fuel projects received 11 times more investment than clean energy projects.
• India's solar PV manufacturing is underdeveloped and lacks international competitiveness, relying on imports for 80%–90% of demand, with domestic panels costing an average of 33% more than Chinese imports.
• The report identifies a significant 'ambition gap' in PSUs, noting a lack of clear corporate targets for diversification to clean energy and no planning for the financial risk of stranded fossil assets.

APA

Viswanathan, B., Viswamohanan, A., Aggarwal, P., Narayanaswamy, D., Geddes, A., Sumarno, T. B., Schmidt, M., Beaton, C., Goel, S., Dutt, A., & Ganesan, K. (2021). Mapping India’s Energy Subsidies 2021. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-07/mapping-india-energy-subsidies-2021.pdf

Chicago

Viswanathan, Balasubramanian, Anjali Viswamohanan, Prateek Aggarwal, Danwant Narayanaswamy, Anna Geddes, Theresia Betty Sumarno, Max Schmidt, et al. Mapping India’s Energy Subsidies 2021. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-07/mapping-india-energy-subsidies-2021.pdf.

Wikipedia

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BibTeX

@techreport{viswanathan2021mapping, author = {Viswanathan, Balasubramanian and Viswamohanan, Anjali and Aggarwal, Prateek and Narayanaswamy, Danwant and Geddes, Anna and Sumarno, Theresia Betty and Schmidt, Max and Beaton, Christopher and Goel, Siddharth and Dutt, Arjun and Ganesan, Karthik}, title = {{Mapping India’s Energy Subsidies 2021}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/system/files/2021-07/mapping-india-energy-subsidies-2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }