EXECUTIVE SUMMARY
Energy subsidies have wide-ranging economic consequences. While aimed at
protecting consumers, subsidies aggravate fiscal imbalances, crowd-out priority public
spending, and depress private investment, including in the energy sector. Subsidies also
distort resource allocation by encouraging excessive energy consumption, artificially
promoting capital-intensive industries, reducing incentives for investment in renewable
energy, and accelerating the depletion of natural resources. Most subsidy benefits are
captured by higher-income households, reinforcing inequality. Even future generations
are affected through the damaging effects of increased energy consumption on global
warming. This paper provides: (i) the most comprehensive estimates of energy subsidies
currently available for 176 countries; and (ii) an analysis of ―how to do‖ energy subsidy
reform, drawing on insights from 22 country case studies undertaken by IMF staff and
analyses carried out by other institutions.
I was initially planning to install a solar gadget in my home But dropped my plan as i was not much aware with the subsidies reform that the GOVT is offering. After reading this blog i will soon install this in my home.
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