Project Leader: Amrita Goldar
Research Team: Sajal Jain and Viraj Sawant
Commencement: February 2017
Funded by: IDFC Foundation
The study examines two aspects of the renewable energy sector – its impact on livelihoods and its impact on competitiveness. The study focuses on the calculation by employing the social accounting matrix (SAM) framed on the national input-output (IO) table. The various sectors in the IO table are broken down to incorporate the RE components and facilitate the construction of a social accounting matrix for the study. The revival of manufacturing industry and increasing its share in the overall GDP and exports are critical to the growth and creation of employment in India. Backward and forward employment multipliers are looked into to study employment effects of increased renewable energy generation. To analyse the impact of renewable energy (RE) on competitiveness, the focus of the study is on high value manufacturing (HVM) industries. There are two approaches employed to identify HVMs, viz., ‘outcome related dimensions’ and ‘enabling dimensions’. Outcome related dimensions take into consideration value added of three types – financial, social, and strategic. The other approach of ‘enabling dimensions’ consists of the skill level of labour, technological intensity, capital intensity, process flexibility, etc. These theoretical parameters have been used to identify the HVMs in the states under observation (Gujarat, Tamil Nadu, & Maharashtra). The HVMs are defined as those that create more than just financial value by delivering value for more of their stakeholders by contracting for capability, triggering innovation, establishing higher standards and eventually contributing to a sustainable society. It thus becomes important that focused policies are designed to develop HVM industries. Understanding this link will emphasise the importance of RE in contributing to India’s lagging manufacturing sector and thereon overall competitiveness of the economy. To build the competitiveness model at the firm level, specific case studies have been selected. High energy consuming industrial clusters were identified in each of the three states studied. All three states boast of a naturally rich and accommodating energy landscape, aiding the process of a faster switch to renewable alternatives. Extensive fieldwork in the three states was conducted to test and validate the developed methodology. This involved meeting not just industrial stakeholders but also the electricity regulatory and development authorities. While the econometric model developed as part of the study will be applied to a database of Indian firms (ASI), qualitative insights gathered during the state-level surveys is being used to enrich the analysis and results.