The complexity of green transition

Inaction on generating new revenue as fossil fuel taxes dry up will harm India's economic prospects

As climate change plays out and India prepares to transition towards lower carbon emissions and a greener economy, a range of challenges needs to be addressed. One such area is the impact on government revenues. An inordinately high proportion of state and central government revenues, which according to one estimate, account for above 3 per cent of India’s gross domestic product (GDP), emanate from fossil fuels. To illustrate, tax and non-tax revenues from fossil fuels are greater than India’s entire defence Budget and also exceed what the central government spends on education and health. 

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