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The report finds that fossil fuel subsidies in India significantly outweigh those for clean energy, with the disparity increasing from 7 to 7.3 times the size of renewable subsidies between FY 2019 and FY 2020. While electric vehicle subsidies more than doubled by FY 2020, renewable energy subsidies fell nearly 45% from their FY 2017 peak. Additionally, seven major energy public sector undertakings invested 11 times more in fossil fuel projects than in renewable energy projects in FY 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.

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.

The annex details updates to India's energy subsidy landscape, noting the discontinuation of several renewable energy schemes and tax holidays for power generation and mineral oil production. It introduces new subsidies linked to the 2017 Goods and Services Tax (GST) for coal, LPG, and renewable energy equipment, alongside the Saubhagya electrification scheme and various national and state-level (Maharashtra) incentives for electric vehicles.

The report provides the first comprehensive inventory of central government energy subsidies in India, covering coal, oil and gas, renewable energy, and electricity transmission and distribution (T&D). It finds that while total quantified subsidies declined from USD 35.8 billion in FY2014 to USD 20.4 billion in FY2016, support for fossil fuels remained more significant than for renewables. The study highlights a shift in the primary recipient of subsidies toward electricity T&D and notes that many consumer subsidies fail to reach the poorest populations, instead benefiting those above the poverty line.