ADB lauds India's fossil fuel subsidy reforms
India has significantly cut its oil and gas subsidies by 85 per cent from 2013 to 2023. This was achieved using policy reforms including phasing out petrol and diesel subsidies and increasing taxes. The extra tax revenue from these increases funded renewable energy projects, electric vehicles, and LPG usage among the rural poor, reshaping India's energy landscape.
"By carefully balancing the combined effect of three key policy levers - retail prices, tax rates, and subsidies on selected petroleum products - the country was able to reduce its fiscal subsidy in the oil and gas sector by 85 per cent, from an unsustainable peak of USD 25 billion in 2013 to USD 3.5 billion in 2023," it said.
In its 'Asia-Pacific Climate Report', ADB said India gradually phased out the subsidy on petrol and diesel (from 2010 to 2014) and carried out incremental tax increases (from 2010 to 2017), which created fiscal space to increase government support for renewable energy , electric vehicles, and strengthening of electricity infrastructure.
"The additional tax revenues from increases in excise duty on petrol and diesel from 2014 to 2017, a period of low international crude oil prices, were also redirected to improve access and target subsidies for expanding the use of liquefied petroleum gas (LPG) among the rural poor," it said.
Subsidies for LPG have since grown and "may now require efforts to improve targeting and to incubate non-fossil-fuel cooking alternatives," it said.
Web Development Intermediate Java Mastery: Method, Collections, and Beyond By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance Financial Literacy i.e Lets Crack the Billionaire Code By - CA Rahul Gupta, CA with 10+ years of experience and Accounting Educator View Program Marketing Future of Marketing & Branding Masterclass By - Dr. David Aaker, Professor Emeritus at the Haas School of Business, UC Berkeley, Author | Speaker | Thought Leader | Branding Consultant View Program Web Development Django & PostgreSQL Mastery: Build Professional Web Applications By - Metla Sudha Sekhar, IT Specialist and Developer View Program HR Human Potential and the Future of Employment By - Lynda Gratton, Prof.
at London Business School, Speaker, Author, Global Thought Leader View Program Marketing Digital Marketing Masterclass by Pam Moore By - Pam Moore, Digital Transformation and Social Media Expert View Program Strategy ESG and Business Sustainability Strategy By - Vipul Arora, Partner, ESG & Climate Solutions at Sattva Consulting Author I Speaker I Thought Leader View Program Marketing Digital marketing - Wordpress Website Development By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert View Program Marketing Digital Marketing Masterclass by Neil Patel By - Neil Patel, Co-Founder and Author at Neil Patel Digital Digital Marketing Guru View Program Artificial Intelligence(AI) AI and Analytics based Business Strategy By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program Web Development Advanced C++ Mastery: OOPs and Template Techniques By - Metla Sudha Sekhar, IT Specialist and Developer View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance AI and Generative AI for Finance By - Hariom Tatsat, Vice President- Quantitative Analytics at Barclays View Program Web Development A Comprehensive ASP.NET Core MVC 6 Project Guide for 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Mastering Full Stack Development: From Frontend to Backend Excellence By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Basics of Generative AI: Unveiling Tomorrow's Innovations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development JavaScript Essentials: Unlock AI-Driven Insights with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Generative AI for Dynamic Java Web Applications with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Leadership Business Storytelling Masterclass By - Ameen Haque, Founder of Storywallahs View Program You Might Also Like: Modern biogas tech offers key innovative solutions for waste management, resource optimisation in agriculture: Piyush Sohani, Sistema.
bio From 2010 to 2017, Government of India introduced a cess (tax) on coal production and imports.
Around 30 per cent of the cess collections were channelled to a national clean energy and environment fund that supported clean energy projects and research.
ADB said the cess significantly contributed to strengthening the budget of Ministry of New and Renewable Energy during 2010-2017 and provided the initial funds for the country's Green Energy Corridor scheme and its National Solar Mission, which helped bring down the cost of utility-scale solar energy and fund many off-grid renewable energy solutions.
"However, with the introduction of Goods and Services Tax (GST) in India after 2017, the cess on coal production and imports was subsumed within the country's GST compensation cess, the flows of which were redirected to compensate states for revenue losses associated with the new tax regime," it said.
As a result of India's subsidy reforms and taxation measures, the country's fossil fuel subsidies plummeted from 2014 to 2018.
You Might Also Like: ADB commits USD 434.25 million loan for solar facility in Assam "Its renewable energy subsidies also reached a peak in 2017 but are now once again growing, with major support schemes targeting solar parks, state-owned enterprises (SOEs), and distributed renewable energy," the report said.
