Electricity consumption and economic growth in India

This paper tries to examine the Granger causality between electricity consumption per capita and Gross Domestic Product (GDP) per capita for India using annual data covering the period 1950–51 to 1996–97. Phillips–Perron tests reveal that both the series, after logarithmic transformation, are non-stationary and individually integrated of order one. This study finds the absence of long-run equilibrium relationship among the variables but there exists unidirectional Granger causality running from economic growth to electricity consumption without any feedback effect. So, electricity conservation policies can be initiated without deteriorating economic side effects.