Energy Subsidies in India

In recent decades, wind power in India been deployed at a tremendous rate, such that wind power projects now account for two thirds of total renewable energy generating capacity and almost one tenth of total installed generating capacity. This case study examines one of the policies that is widely considered to be the primary driver behind this expansion—accelerated depreciation (AD) for wind power projects.

The Indian government’s declaration of a formal end to diesel price regulation in October 2014 marked the culmination of a two-year process of price reform. The effective removal of diesel subsidies, although not yet accompanied by comprehensive price decontrol, nevertheless represents an important milestone in the reform of energy pricing in India, and provides policy-makers with a useful case study of successful fossil fuel subsidy reform. This report investigates lessons learned.

As part of its work on energy policy and sustainable development in India, the Global Subsidies Initiative publishes a regular briefing on issues related to energy subsidies.

Geneva—11-13 February—Last week the Global Subsidies Initiative (GSI) of the IISD Energy programme helped launch a new gender and energy initiative organised by ENERGIA and funded by UKDFID in Geneva at the IISD offices with 30 consortium participants.  The IISD programme will focus on energy empowerment, energy sector reform and impacts for gender.

This report analyzes kerosene subsidies received by the state governments through the Public Distribution System.

On Saturday 18th October the Indian Government announced a series of policy decisions in relation to energy, including decontrol of diesel pricing, revision of natural gas prices on a market-linked basis, and proposed changes to domestic LPG subsidy entitlements and delivery mechanisms. This package of measures, presented as a reflection of the new NDA administration’s reformist intent, represents a complex mix of continuity and change in relation to the previous UPA government’s policies, with important implications (both positive and negative) for the future direction of Indian energy policy.

This report brings to light the Government of India’s spending on fuel subsidies.

As part of its work on energy policy and sustainable development in India, the Global Subsidies Initiative publishes a regular briefing on issues related to energy subsidies.