India needs 2.5 times the current energy consumption to raise per capita income by $5,000
04 July 2019
India needs to increase its per capita energy consumption at least 2.5 times to increase its real per capita GDP by $5,000 to enter the upper-middle income group, says the Economic Survey 2018-19 tabled in Parliament on Thursday.
The Economic Survey says, “India, with a per-capita energy consumption of about one-third of the global average, will have to increase its per capita energy consumption at least 2.5 times to increase its real per capita GDP by $5000 per capita, in 2010 prices, to enter the upper-middle income group.” It adds, “If India has to reach the HDI level of 0.8, it has to increase its per capita energy consumption by 4 times.” This will require huge resources that would also need to increase with time, the Survey notes.
The Survey further says that though India accounts for around 18 per cent of world’s population, it uses only around 6 per cent of the world’s primary energy. India’s per capita energy consumption equals 0.6 tonnes of oil equivalent (toe) as compared to the global per capita average of 1.8 toe.
Referring to the close link between energy consumption and various social indicators, the Economic Survey says, “Energy is the mainstay of the development process of any economy. The priority for the government is ensuring access to sustainable and clean energy sources.” India’s economic future and prosperity is dependent on her ability to provide affordable, reliable and sustainable energy to all her citizen, the Survey concludes.
Noting that energy efficiency is a strategy that can lead to a win-win situation through better utilisation of energy resources, the Economic Survey says, “Future policy direction should orient itself to enhanced energy efficiency programmes in different sectors of the economy as well as technological solutions to better utilise the natural resource endowments of the country for greater prosperity.”
Referring to a BEE study, the Survey says, “Energy efficiency programme has resulted in total cost savings worth Rs53,000 crore (approx) in 2017-18 and contributed in reducing 108.28 million tonnes of CO2 emissions. The contribution is largely from three major programmes – Perform Achieve and Trade (PAT), UJALA and Standards & Labelling Programme.”
The Survey further notes that the energy intensity of India’s GDP started declining to a much lower level of per capita GDP compared to the developed world. India’s primary energy intensity of GDP has fallen from 0.0004 toe in 1990 to 0.0002 toe in 2017.