Exploring the relationship between Energy Consumption and Economic Growth in India: Insights from Bivariate and Multivariate Analyses
DOI:
https://doi.org/10.31305/rrijm.2025.v10.n2.030Keywords:
Energy Consumption, Economic Growth, Multivariate AnalysesAbstract
Energy is regarded as one of the key elements that contributes to economic expansion. Using yearly data from 1991 to 2019, the study investigates the empirical relationship between India's economic development and energy production. Multivariate and bivariate analysis have been conducted since, in addition to labor and capital, energy is a crucial input in the manufacturing process. The study has performed Johansen Co-integration to evaluate long run relationships, Vector Autoregressive and Vector Error Correction Method for short run relationship. The multivariate analysis results show the long run relationship among variable. The result of normality coefficient of Energy Generated has shown positive and insignificant impact on GDP, while GCF has positive and significant impact on GDP. According to the study's broad policy implications, India must concentrate on developing sustainable methods of producing power in order to achieve rapid economic growth in the years to come because of the country's limited energy resources.
References
Akarca, A.T., Long, T.V., (1979): “Energy and employment: a time series analysis of the causal relationship”, Resources Energy, 2, 151-162.
Akarca, A.T., Long, T.V., (1980): “On the relationship between energy and GNP: a re-examination”, Journal of Energy Development, 5, 326-331.
Azam, A., Rafiq, M., Shafique, M., Ateeq, M and Yuan, j. (2020): “Causality Relationship Between Electricity Supply and Economic Growth: Evidence from Pakistan”, Energies, 13,837.
Barney .F, Franzi .P.(2002). “The future of energy From Future Dilemmas: Options to 2050 for Australia’s population, technology, resources and environment”. CSIRO Sustainable Ecosystems.pp157 – 189.
Central Electricity Authority (2012): Annual Report, Ministry of Power, Government of India.
Ghosh, S. (2002): “Electricity Consumption and Economic Growth in India”. Energy Policy 30: 125-129.
Giri, A.K., Mohapatra, G. (2021): “Examining the Relationship Between Electricity Consumption, Economic Growth, Energy Prices and Technology Development in India”, The Indian Economic Journal ,1-19.
Hwang, D., Gum, B., (1992): “The causal relationship between energy and GNP: the case of Taiwan”, J. Energy Dev. Spring, 219-226.
International Energy Outlook (2016): Independent Statistics and Analysis, U.S. Energy Information Administration.
Johansen, S., Juselius, K., (1990): “Maximum likelihood estimation and inferences on cointegration with approach”, Oxford Bulletin of Economics and Statistics May, 169-209.
Kumari, A. and Sharma, A.K., (2016): “Analyzing the causal relations between electric power consumption and economic growth in India”, The Electricity Journal 29, 28–35.
Kraft, J. and Kraft, A., (1978): “On the relationship between energy and GNP”, Journal of Energy and Development 3, 401–403.
Masih, A.M.M., Masih, R. (1999): “Energy Consumption, Real Income and Temporal Causality: Results from a Multi-Country Study based on Cointegration and ErrorCorrection Modelling Techniques”. Energy Economics 18: 165-183.
Morimoto, K., Hope, C., (2004): “Impact of electricity supply on economic growth in Sri Lanka”. Energy Economics 26, 77–85.
Majeeed, T. M., Anwar, A. and Luni, T.(2021): “The Impact of Renewable and Non-Renewable Energy Consumption on Economic Growth: A Global Perspective with Developed and Developing Economies” Pakistan Journal of Research and Social Sciences, Vol. 15 (2), 286-307.
Masuduzzaman, M.,(2012): “Electricity consumption and economic growth in Bangladesh: cointegration and causality analysis”, Global Journal of Management and Business Research, 12, 11, 46–56.
Rufael, Y. Wolde, (2006): “Electricity consumption and economic growth: A time series experience for 17 African countries”. Energy Policy 34: 1106 – 1114.
Ramakrishna, G., Rena, R. (2013): An empirical analysis of energy consumption and economic growth in India: are they casually related?, STUDIA OECONOMICA, 58(2): 22-40.
Stern, D.I. (1993) Energy and Economic Growth in the USA: A Multivariate Approach, Energy Economics, 15(1), 137-150.
Tabasi, S., Aslani A. (2016): “Prediction of Energy Consumption by Using Regression Model”, Computational Research Progress in Applied Science & Engineering, Vol. 02(03), 110-115.
Yang, H.Y.(2000) A Note on the Causal Relationship between Energy and GDP in Taiwan, Energy Economics, 22, 309-317.
Zahid, A. (2008): “Energy-GDP Relationship: A Causal Relationship for the five countries of South Asia”, Applied Econometrics and International Development, Vol 8-1.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
This is an open access article under the CC BY-NC-ND license Creative Commons Attribution-Noncommercial 4.0 International (CC BY-NC 4.0).
