Analysing Energy Induced Technological Changes in Indian Economy : A Sectoral Study

Recognising the nexus between growth and energy use, a fast growing country like India, is an ideal case for empirical assessment of increasing energy use in terms of consumption pattern driven by shifts in demand and technological changes. While the introduction of new technology contributes to lower energy use due to improved efficiency, the introduction of energy consuming machinery itself may cause an increase in energy use. Therefore, it is important to explore the sectoral dynamics of development. We study the relative contributions at the sector level in an economy-wide framework using the hybrid Input-output model for structural decomposition analysis. Results for the overall economy show that changes in the production technology have been energy saving with a gradual response of non-energy inputs, as compared with energy inputs. Comparison of the changes in energy use highlights the need to reduce energy requirements from final demand expansion either through price corrections or along with a parallel improvement in technological performance