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The incidence of fuel taxation in India

Author

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  • Ashokankur Datta

    (Indian Statistical Institute, New Delhi
    Indian Statistical Institute, New Delhi)

Abstract

Fuel taxes have returned to centre stage as a potential policy instrument for greenhouse gas abatement. However critics have complained that a fuel tax is regressive. Such claims are based on few studies conducted in developed countries. This paper tests the validity of this claim for India. It uses data from a representative household survey covering more than 124 thousand Indian households. The study finds that a fuel tax is progressive. Using an input-output approach, this paper tries to study the distributional effect, once price change in non fuel goods (arising out of fuel tax) is considered. The progressivity result holds good even when one considers indirect consumption of fuel through its use as an intermediate input.

Suggested Citation

  • Ashokankur Datta, 2008. "The incidence of fuel taxation in India," Discussion Papers 08-05, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:08-05
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    File URL: http://www.isid.ac.in/~pu/dispapers/dp08-05.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pooja Rathore & Sangeeta Bansal, 2013. "Distributional Effects of Adopting Carbon Tax in India," Review of Market Integration, India Development Foundation, vol. 5(3), pages 271-302, December.
    2. Blackman, Allen & Osakwe, Rebecca & Alpizar, Francisco, 2010. "Fuel tax incidence in developing countries: The case of Costa Rica," Energy Policy, Elsevier, vol. 38(5), pages 2208-2215, May.
    3. Sterner, Thomas, 2012. "Distributional effects of taxing transport fuel," Energy Policy, Elsevier, vol. 41(C), pages 75-83.

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    More about this item

    Keywords

    carbon emission; tax burden; regressivity;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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