India's Energy Transition: Subsidies for Fossil Fuels and Renewable Energy, 2018 Update
Pricing drives economic decision making, and subsidies (along with taxation) are one of the key tools that governments use to influence prices, and through them investment decisions and consumer behaviour.
This update highlights the most significant developments in the dynamic domain of India’s energy subsidy policies in FY 2017 and explores the role that subsidies play with respect to four themes: energy access; the role of coal; prospects for renewables; and a transport sector transition. It finds that the total value of quantified energy subsidies has declined from INR 2,15,974 crore (USD 35.7 billion) in FY2014 to INR 1,51,484 crore (USD 23 billion) in FY2017. Subsidies to fossil fuels have declined over this period, while subsidies to renewables and electric vehicles (EVs) have increased. However, the absolute value of subsidies to fossil fuels is much greater than those to renewables and EV.
You might also be interested in
Electricity overcharging: Cross-subsidies cost businesses Rs 75k crore in FY19
Since the National Tariff Policy 2016 prescribed the tolerable extents of cross-subsidy among various segments of electricity consumers, the market-distorting system hasn’t seen a smidgen of correction.
Electricity subsidies increased 32% since FY 2016: Report
New Delhi: Direct tariff electricity subsidies from the state governments have increased 32 per cent since FY 2016, amounting to Rs 1,10,391 crore ($14.96 billion) in FY 2019.
Soaring power subsidies reflect discom weakness
The precarious state of India’s power distribution companies can be seen in the sharp rise in state government subsidies to such companies over the past few years, even as sales and profitability have dipped.
View: With India transitioning towards renewables, it's time for PSUs to catch up
PSUs can't just turn into Public Spending Units that try to buy their way out of this crisis. They must look at the bigger picture, and become Public Sustainability Units.