Navigating the fiscal implications of a just transition

As India’s clean energy transition gathers pace, declining revenue from fossil fuels could disproportionately affect its coal-producing states. At the same time, state governments that depend on fossil fuel revenue will face increased budgetary pressures to ensure an equitable and just transition. This briefing note assesses the potential fiscal implications of the transition in India’s top three coal producing states – Odisha, Jharkhand and Chattisgarh – and suggests approaches for economic diversification away from coal, identifying a need for early action on three fronts to help prioritise and create fiscal space for critical public expenditure needed to support a just transition.