India's Energy Scenario
Energy in India for the Coming Decades
Anil Kakodkar
Chairman, Atomic Energy Commission, India
chmn@dae.gov.in
The reforms initiated in India since the beginning of the nineties have led to rapid economic progress and better growth rates. In the first decade of this century the growth rates seem to be still better. Studies by several academics and consultants forecast continued high growth rate for the next several decades. I’ll quote two such studies, one by Dominic Wilson and Roopa Purushothaman of Goldmann Sachs [1] and the other by Dani Rodrik and Arvind Subramanian of the International Monetary Fund [2].
Wilson and Purushothaman write, “India has the potential to show the fastest growth over the next 30 to 50 years. Growth rate could be higher than 5 percent over the next 30 years and close to 5 percent as late as 2050 if development proceeds successfully.” Rodrik and Subramanian write, “…..growth in capital stock together with growth in factor productivity will yield output growth of 5.4 percent. Over the next 20 years, the working age population is projected to grow at 1.9 percent per year. If educational attainment and participation rates remain unchanged, labor growth will contribute another 1.3 percent, yielding an aggregate growth rate of 6.7 percent per year, or a per capita growth rate of 5.3 percent. This is a lower bound estimate and, even so, would be significantly greater than the per capita growth rate of 3.6 percent achieved in the 1980s and 1990s. Over a 40-year period, a 5.3 percent growth rate would increase the income of the average person nearly 8-fold.”
Growth in economy is made possible by several inputs, the two most important being energy and human resource. In this conference, we are concerned about energy and so I’ll confine myself to energy. Energy is the engine for growth. It multiplies human labour and increases productivity in agriculture, industry as well as in services. To sustain the growth rate in economy,
Anil Kakodkar
Chairman, Atomic Energy Commission, India
chmn@dae.gov.in
The reforms initiated in India since the beginning of the nineties have led to rapid economic progress and better growth rates. In the first decade of this century the growth rates seem to be still better. Studies by several academics and consultants forecast continued high growth rate for the next several decades. I’ll quote two such studies, one by Dominic Wilson and Roopa Purushothaman of Goldmann Sachs [1] and the other by Dani Rodrik and Arvind Subramanian of the International Monetary Fund [2].
Wilson and Purushothaman write, “India has the potential to show the fastest growth over the next 30 to 50 years. Growth rate could be higher than 5 percent over the next 30 years and close to 5 percent as late as 2050 if development proceeds successfully.” Rodrik and Subramanian write, “…..growth in capital stock together with growth in factor productivity will yield output growth of 5.4 percent. Over the next 20 years, the working age population is projected to grow at 1.9 percent per year. If educational attainment and participation rates remain unchanged, labor growth will contribute another 1.3 percent, yielding an aggregate growth rate of 6.7 percent per year, or a per capita growth rate of 5.3 percent. This is a lower bound estimate and, even so, would be significantly greater than the per capita growth rate of 3.6 percent achieved in the 1980s and 1990s. Over a 40-year period, a 5.3 percent growth rate would increase the income of the average person nearly 8-fold.”
Growth in economy is made possible by several inputs, the two most important being energy and human resource. In this conference, we are concerned about energy and so I’ll confine myself to energy. Energy is the engine for growth. It multiplies human labour and increases productivity in agriculture, industry as well as in services. To sustain the growth rate in economy,
References: [4] International Energy Agency (IEA), Key World Energy Statistics, 2003.