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India’s Energy Transition

23 Jul 2019

This paper examines how the latest government support for EVs compares with subsidies for conventional vehicles and their main fuels.3 What is the likely impact of these latest policy developments on the achievement of government objectives in the transport sector? [...] The draft policy seeks to enhance the contribution of the automobile sector to GDP, increase automobile exports by 30–40 per cent of overall output over the next decade, generate skill development and employment, and drive R&D. [...] We estimate the reduction in the OMC margin resulted in an additional INR 10,783 crore (USD 1.5 billion) as a form of income and price support in FY 2019.8 The fuel price cut appears to be a subsidy (see Box 1), based on the government’s stated objective to “extend an immediate relief of INR 2.50 on both petrol and diesel to the consumers” (Business Today, 2018) (Box 1). [...] Therefore for the purposes of this brief, the full value of the OMC margin reduction is considered as a subsidy in the form of income and price support. [...] Evaluation of the subsidy status of the policy provides insight into whether the government is favouring the subsidized good over alternatives and the consequences of that policy.
environment energy economics air pollution renewable energy economy states coal poverty electricity generation diesel electric vehicle tariff science and technology petrol gas environmental pollution road transport transport vat fuel ghg emissions electric car electricity pricing car charging station gst cars
Pages
36
Published in
Winnipeg, MN, CA

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