This study examine the effects of electricity consumption from different sectors such as agricultural, commercial, domestic, Industrial (HV), Industrial (LV-MV) and Miscellaneous sector on economic growth over the period of 1981-2019 in case of India. We used SVAR framework and concluded that the consumption of electricity from agriculture sector has a negative impact on economic growth. Whereas, the Industrial (HV and MV-LV) and commercial electricity consumption have positive impact on economic growth. Similarly, electricity consumption by the domestic sector has less positive effect on economic growth. Further, we computed the total factor productivity growth (TFP) by using DEA method and show the effects of sector wise electricity consumption on TFP as the robustness of our analysis. We obtain similar kind of results. From the policy perceptive, the study suggests that government must speed up the construction of a power grid to improve the availability of electricity for achieving higher rate of economic growth.
Research Article
Impact of Sectoral Decompositions of Electricity Consumption On Economic Growth In India: Evidence From SVAR Framework
https://doi.org/10.21203/rs.3.rs-1118041/v1
This work is licensed under a CC BY 4.0 License
Journal Publication
published 04 Mar, 2022
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Electricity Consumption
Economic Growth
TFP
DEA
Commercial and Structural VAR
Table 1 Results of Unit root test using the ADF and the PP tests
|
Variable |
Model |
Augmented Dickey Fuller test |
Phillips Perron Test |
Decision |
||
|
Levels |
First Difference |
Levels |
First Difference |
|||
|
Y |
Constant |
-1.511163 |
-10.61074*** |
-1.515691 |
-10.61288*** |
I(1) |
|
Trend |
-2.274482 |
-10.6064*** |
-2.333801 |
-10.61754*** |
||
|
None |
2.187519 |
-10.61074*** |
2.147657 |
-10.01208*** |
||
|
TFP |
Constant |
-3.877764 |
-9.483763*** |
-3.817216 |
-18.37943*** |
I(1) |
|
Trend |
-4.888865 |
-9.463724*** |
-5.032597 |
-18.31104*** |
||
|
None |
-2.185843 |
-9.511114*** |
-2.716509 |
-18.37907*** |
||
|
AGR |
Constant |
-2.774981 |
-15.95125*** |
-4.264219 |
-30.53975*** |
I(1) |
|
Trend |
-6.600538 |
-15.89053*** |
-6.496981 |
-30.60176*** |
||
|
None |
-1.577409 |
-16.00189*** |
-2.395992 |
-28.56421*** |
||
|
COM |
Constant |
-1.058441 |
-11.81701*** |
-1.075870 |
-11.73386*** |
I(1) |
|
Trend |
-1.485340 |
-11.76336*** |
-1.534274 |
-11.68541*** |
||
|
None |
-0.990062 |
-11.80495*** |
-0.993194 |
-11.72256*** |
||
|
DOM |
Constant |
1.349772 |
-3.219352*** |
3.057039 |
-8.701830*** |
I(1) |
|
Trend |
-2.224113 |
8.024973*** |
-0.442376 |
-9.042026*** |
||
|
None |
2.225648 |
-5.440871*** |
8.455508 |
-6.039995*** |
||
|
IN(HV) |
Constant |
0.963449 |
-7.997722*** |
1.955677 |
-6.341920*** |
I(1) |
|
Trend |
-1.704334 |
-7.110439*** |
-0.804525 |
-6.647633*** |
||
|
None |
1.126749 |
-6.437082*** |
3.826124 |
-6.271227*** |
||
|
IN(LM) |
Constant |
1.264844 |
-7.202052*** |
4.168149 |
-8.890193*** |
I(1) |
|
Trend |
-1.444843 |
8.162364*** |
-0.84532 |
-9.054676*** |
||
|
None |
1.464648 |
-6.330771*** |
8.128539 |
-5.724387*** |
||
|
MISC |
Constant |
1.744929 |
-6.889955*** |
1.109274 |
-5.952123*** |
I(1) |
|
Trend |
-1.715970 |
-7.093286*** |
-0.793414 |
-5.647823*** |
||
|
None |
2.879514 |
-6.546182*** |
3.937235 |
-6.292647*** |
||
Source: Author’s own computation
Note: Y, TFP, AGR, COM, DOM, IN(HV), IN(LM) and MISC represent the economic growth, total factor productivity, electricity consumption in the agricultural, commercial, domestic, industrial (HV), industrial (LV-MV) and miscellaneous sector respectively. (***), (**) and (*) indicate 1%, 5% and% level of significance, respectively
Table 2 Results of Structural parameter
|
Parameter |
Coefficients |
||||||
|
Agriculture |
Commercial |
Domestic |
Industries (HV) |
Industries (LV-MV) |
Miscellaneous |
||
|
|
0.4503* |
0.4971* |
0.4424* |
0.4827* |
0.4107* |
0.1898* |
|
|
|
0.6639*** |
-0.4763 |
-0.0158 |
-0.5946*** |
1.3330** |
0.1604 |
|
|
|
0.0723 |
0.1079 |
0.0743 |
0.1017 |
0.0811 |
0.3201 |
|
|
|
1.4981* |
1.4878* |
1.4682* |
1.5098* |
1.4935* |
1.4735* |
|
|
|
-0.3466* |
0.4717* |
0.0274* |
0.5725* |
0.6274* |
-0.0731 |
|
|
|
1.6227* |
1.1977* |
0.5774* |
1.2284* |
1.9558* |
4.9928* |
|
|
|
0.6101* |
0.6181* |
0.6230* |
0.6071* |
0.6128* |
0.6245* |
|
Source: Author’s own calculations; *, ** and *** represent significance at 1*, 5% and 10% respectively.
Table 3 Results of Structural parameter
|
Parameter |
Coefficients |
|||||
|
Agriculture |
Commercial |
Domestic |
Industries (HV) |
Industries (LV-MV) |
Miscellaneous |
|
|
|
0.4100* |
0.4952* |
0.4704* |
0.4974* |
0.3704* |
0.2123* |
|
|
0.1712*** |
0.0771* |
-0.2047* |
-0.0135 |
0.5240** |
0.7987 |
|
|
0.0862 |
0.1027 |
0.0921 |
0.1079 |
0.0815 |
0.1117 |
|
|
1.3640* |
1.3306* |
1.3563* |
1.3372* |
1.4491* |
1.3895* |
|
|
-0.0317*** |
0.0278** |
0.4627* |
0.1115* |
0.1771** |
0.1535* |
|
|
1.9378* |
1.1854* |
0.6744* |
1.1280* |
2.2498* |
4.5115* |
|
|
0.6949* |
0.7127* |
0.6984* |
0.7063* |
0.6497* |
0.6772* |
Source: Author’s own calculations; (*, ** and *** represent significance at 1*, 5% and 10% respectively.