India has since 2010 made noteworthy progress on fossil fuel subsidy reform through a calibrated 'remove', 'target', and 'shift' approach, the Asian Development Bank (ADB) said in a new report.
"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 o