Does any relationship between energy consumption and economic growth exist in India? A var model analysis

Abstract

AbstractEnergy is the lifeblood of the global economy, a key input to almost all the goods and services of the modern world. The primary objective of this study is to examine the relationships between per capita energy consumption and per capita GDP in India from 1970–1971 to 2014–2015. The data analysis was conducted using the three‐stage Johnson cointegration, vector autoregression and Granger causality test. The results of the study documented that there was the presence of unidirectional causality running from per capita GDP to per capita energy consumption and the absence of a long‐term equilibrium relationship between per capita energy consumption and per capita GDP in India. More significantly, India has already demonstrated an impressive ability to develop, deploy, replicate and scale up innovative, market‐based approaches to energy efficiency. The country has an excellent basis for further energy efficiency policy innovation and market creation, including a strong community of non‐governmental organisations, research institutes and think tanks active in energy efficiency.