India's Fuel Subsidies: Policy recommendations for reform This policy brief summarizes two research papers on fossilfuel subsidy reform in India and highlights the key policy recommendations.
The Government of India spent over US 9 billion subsidizing fuel products diesel, kerosene, LPG and, to a lesser extent, gasoline in. Fuel subsidy reform has been on the Indian governments policy reform agenda over the last decade. 1 A number of reports have been produced that analyze the approach to fuel pricing in India, the need for fuel subsidy reform, and reform options. 2 Indias government has recently taken a number of measures to reform its fuel subsidy system.
Even if merit subsidies are set aside, the remaining subsidies alone amount to 10. 7 of GDP, comprising 3. 8 and 6. 9 of GDP, pertaining to Centre and State subsidies respectively.
The average allIndia recovery rate for these nonmerit goodsservices is just 10. 3, implying a subsidy rate of almost 90. Indias subsidy regime had its hand behind this problem. Pulses are most suitable to be grown in areas of Maharashtra and Madhya Pradesh, yet large parts of these areas are under cultivation of sugarcane. Reducing fuel subsidies Besides that, government should also start reducing fuel subsidies too.
A high subsidy on fuel will bring to less budget spending on other potential development fields such as infrastructure, supply of Lessons Learned from Attempts to Reform Indias Kerosene Subsidy 1. Introduction The primary focus of this paper is Indias attempts to reform its longstanding subsidy for kerosene for household use. The subsidy was initially established as a distribution scheme during fuel shortages in World War II. EFFECTS OF SUBSIDY REMOVAL In a country of power instability the removal of fuel subsidy has triggered double in the price of fuel.
1. increased price of fuel and other petroleum product 2. increase in transport fares 3. increased price of food products. Essay on Need of Fuel Subsidy Complete Essay for Class 10, Class 12 and Graduation and other classes.
Need of Fuel Subsidy The subsidy on petroleum products in India are Essay on fuel subsidy in india intended to benefit the consumers through reduced prices and are thus essentially consumer subsidies.
EFFECTS OF SUBSIDY REMOVAL In a country of power instability the removal of fuel subsidy has triggered double in the price of fuel. 1. increased price of fuel and other petroleum product 2. increase in transport fares 3. increased price of food products. According to the International Institute for Sustainable Development, around 30 countries trimmed their fossil fuel subsidy programs over the past year.
That is why, countries such as Indonesia, Egypt, China and as Mr. Subramanian noted India have been able to achieve subsidy reform. Indias Fuel Subsidies: Policy Recommendations for Reform (IISDGSI, 2012) summarizes the research from the previous two reports and highlights the key policy recommendations.
This factsheet provides an introduction to the research, highlighting key facts about Indias fuel subsidies, and The current account of India depends on the amount of subsidy is provides for various products such as fuel, Electricity and others. And among them fuel subsidy such as on diesel, petrol and kerosene take a bulk of India expenditure. FossilFuel Subsidy Reform in India: Cash transfers for PDS kerosene and domestic LPG iii Acknowledgements This report is a joint production of The Energy and Resources Institute and the International Institute for Sustainable A subsidy is an assistance paid to a business or economic sector.
Most subsidies are made by the government to producers or distributed as subventions in an industry to prevent the decline of that industry (Subsidy, 2012).