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The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India, Rahul Anand, David Coady, Adil Mohommad, Vimal Thakoor, James Walsh

Rising fuel subsidies have contributed to fiscal pressures in India. A key policy concern regarding subsidy reform is the adverse welfare impact on households, in particular poor households. This paper evaluates the fiscal and welfare implications of fuel subsidy reform in India. Fuel subsidies are found to be badly targeted, with the richest ten percent of households receiving seven times more in benefits than the poorest ten percent. Although subsidy reform would generate substantial fiscal savings, the associated increases in fuel and other prices would lower household real incomes of all income groups. Better targeting of fuel subsidies would fully protect lower income households while still generating substantial net fiscal savings. Lessons from subsidy reforms in other countries are identified and discussed
Table Of Contents
Cover; Contents; I. Introduction; II. Background; III. Magnitude and Financing of Fuel Subsidies in India; A. Structure of the Indian Petroleum Sector; Figures; Figure 1. Crude Oil and Petroleum Products: Production, Imports, and Exports; B. Under-pricing of Petroleum Products; Figure 2. Allocation of Domestic Fuel Product Distribution; Figure 3. Evolution of Fuel Product Prices and Subsidies, 2004-2012; C. Magnitude and Financing of Fuel Subsidies; IV. Price and Welfare Impacts of Fuel Subsidy Reform; A. Methodology; Figure 5. Allocation of Domestic Fuel Product Distribution
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (32 p.)
Specific Material Designation
Form Of Item

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