Chhattisgarh’s Fossil Investments 4 Times Higher Than Clean Energy Funding: Report

Chhattisgarh’s energy sector received more than Rs 16,672 crore ($2 billion) in government support in fiscal year 2024, with subsidies and investments for fossil fuels nearly four times higher than those for renewable energy, according to a new report by the International Institute for Sustainable Development (IISD) and Swaniti Initiative.

The study, Mapping India’s State-Level Energy Transition: Chhattisgarh, found that Rs 12,648 crore ($1.5 billion) of the total support came in the form of subsidies, while public sector undertakings invested another Rs 4,024 crore ($465 million).

Coal Gets Largest Subsidies 

Coal received the largest share of all quantified subsidies at 26%, while renewable energy accounted for just 8%, the report said. Energy-related revenues in Chhattisgarh reached Rs 22,532 crore ($2.7 billion) — about 22% of the state’s total revenues — with 80% of that derived from fossil fuels, leaving the state exposed to future energy market shifts.

“Proactive fiscal planning has never been more important for Chhattisgarh,” said Shruti Sharma, Lead in Affordable Energy at IISD. “With nearly a quarter of state revenues tied to fossil fuels, diversifying energy resources and revenue streams is critical to protect jobs, secure long-term growth, and deliver on the state’s vision of Viksit Chhattisgarh 2047.”

Need For Net-Zero Goals

The report urged both state and central governments to align fiscal support with India’s net-zero goals by incorporating clear milestones in Chhattisgarh’s Vision 2047 plan and partnering with NITI Aayog on green budgeting. It also recommended targeting electricity subsidies toward low-income households and redirecting savings into distributed renewable energy projects such as rooftop solar and solar pumps.

Chhattisgarh, home to only 2% of India’s population, contributes over 21% of the country’s fossil fuel output and hosts 7% of its installed thermal power capacity. The report said this gives the state a strategic opportunity to lead clean energy investment and innovation while managing a “just transition” for coal-dependent regions.

The Swaniti Initiative’s accompanying analysis found that three of Chhattisgarh’s six coal-producing districts rank among the most vulnerable to a potential energy transition.

“Chhattisgarh will remain a major coal producer in the coming decade; however, older regions such as Chirimiri, where coal reserves have depleted, need immediate transition planning,” said Chinmayi Shalya, Senior Fellow at Swaniti Initiative. “This can serve as a blueprint for future just transition planning in other coal-heavy districts.”

The report concluded that Chhattisgarh must proactively design fiscal and industrial policies that support local economic diversification, job creation, and clean energy access, while aligning with India’s broader decarbonization objectives.