Abstract
The removal of energy subsidies is considered to be the first step towards a better environment. In order to pursue a policy for subsidy removal, one needs to know exactly the amount of subsidies accorded to different fuels. In this paper, the subsidies involved in the coal sector in India are estimated. Existing prices are reviewed, economic prices are estimated and the two are compared to arrive at appropriate subsidies or taxes. The subsidies are also distributed among different sectors and policy implications of subsidy removal are discussed. Finally, the need to have a larger data sample to study the coal industry is stressed, in order to better understand the cost structure.
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