Energy poverty and economic development: Household-level evidence from India

Abstract

In this paper, we investigate the relationship between energy poverty and economic development in India and its trend over a decade. For this purpose, we estimate a Multidimensional Energy Poverty Index (MEPI) and an index of development at the district level using household level data. Empirical results show that energy poverty is quite extensive in India with substantial variations across the states and districts. Over the years, energy poverty shows a declining trend at all-India level, but with the exception of few bigger and less developed states. Further, the study records a negative relationship between economic development and energy poverty, the strength of relationship has increased during the study period. Among the components of economic development, education has a greater impact on reducing energy poverty compared with income. The study observes that energy poverty and socio-economic backwardness in India are highly correlated; Dalits and Adivasis have higher energy poverty and a lower rate in the reduction of energy poverty in comparison with the national average. Energy poverty is lower in urban India in comparison with rural India.