




































Ecology, Economy and Society–the INSEE Journal 3 (2): 19–25, July 2020 

 
COMMENTARY 
 

India’s Energy Strategy for Inclusive Sustainable 
Development  
 

Kirit S. Parikh   
 
1. INTRODUCTION  

While energy is critical for economic growth, it is also a crucial factor in 
improving the quality of human development. Energy does not comprise 
only electricity; it also includes fuels used for cooking and mobility. Energy 
use has led to much environmental and ecological degradation: air pollution 
from the use of fossil fuels, land degradation due to coal mining, and 
deforestation resulting from hydro development. Moreover, burning fossil 
fuels contributes to climate change. India aspires to be a global economic 
power that balances inclusive growth for human development and the 
challenges of pollution and climate change. 

In view of the COVID-19 pandemic, the need for inclusive growth has 
become even stronger. India’s energy strategy has to help fulfil these 
aspirations. 

1.1. The current energy scene 

In 2018, the Indian economy consumed a total of 809 million tonnes of oil 
equivalent (Mtoe) and 1,547 billion-kilowatt hour (BkWh) of electricity. 
That same year, in per capita terms, China’s consumption of electricity was 
nearly five times that of India.  

India imports all major fossil fuels. In 2019–20, 87% of crude oil (227 
million tonnes [MT]) used in the country was imported. However, the net 
export of petroleum products was 22 MT (PPAC n.d.[a]). Thus, nearly 80% 

                                                        
 Integrated Research and Action for Development (IRADe), C-80, Shivalik, Malviya Nagar, 
New Delhi - 110017, India; kparikh@irade.org. 

Copyright © Parikh 2020. Released under Creative Commons Attribution-NonCommercial 
4.0 International licence (CC BY-NC 4.0) by the author.  

Published by Indian Society for Ecological Economics (INSEE), c/o Institute of Economic 
Growth, University Enclave, North Campus, Delhi 110007.  

ISSN: 2581-6152 (print); 2581-6101 (web). 

DOI: https://doi.org/10.37773/ees.v3i2.185  

https://doi.org/10.37773/ees.v3i2.185


Ecology, Economy and Society–the INSEE Journal [20] 

of the country’s consumption of petroleum products comes from imported 
crude oil. In the case of natural gas, India imported nearly 50% of its 
domestic requirement. While India’s domestic oil and gas resources are 
limited, it has an abundance of coal. Still, nearly 24% of the country’s total 
coal consumption was imported. 

The 2006 report of the expert group set up by the Planning Commission on 
Integrated Energy Policy (IEP) notes that extractable coal reserves in India 
will be exhausted in 35–40 years if coal consumption keeps growing, and, in 
the long term, India will have to shift to renewable resources such as wind 
and solar energy (Parikh et al. 2006). As a consequence, and as a part of the 
National Action Plan for Climate Change (NAPCC) to promote solar 
power, the Jawaharlal Nehru National Solar Mission was launched in 
January 2010 with the aim of generating 20,000 megawatt (MW) of solar 
capacity by 2022. The government recognized that subsidies for solar power 
generation in the form of assured feed-in tariffs (FIT) would have to be 
provided during the initial stages. However, to incentivize efficiency and 
cost reduction, competitive reverse bidding for the required FIT was 

initiated. As a result, the required FIT came down from ₹13.5/kWh in 2010 

to around ₹2.5/kWh in 2017, and it has further come down to ₹2.36/kWh 
in June 2020. 

1.2. Energy use and local environmental pollution 

Our current energy use patterns cause a great deal of local environmental 
pollution. Coal mines degrade the land and cause deforestation. Fossil fuel 
use causes severe air pollution in our cities. All mines are required to restore 
the land that they have adversely affected. All firms that cause deforestation 
are also required to carry out compensatory afforestation and contribute to 
the Compensatory Afforestation Management and Planning Agency 
(CAMPA) Fund. Unfortunately, however, the funds remain largely 
unutilized. Unless the government is serious about it, afforestation is not 
implemented effectively. Therefore, a better strategy would be to prevent 
deforestation.  

 

2. ENERGY POLICIES FOR LOW-CARBON INCLUSIVE 
SUSTAINABLE DEVELOPMENT 

In recent years, concerns regarding the growing dependence on imports, 
climate change, and severe air pollution in cities across India, as well as the 
falling costs of solar photovoltaics (PV), have led to changes in energy 
policies in India. 



[21] Kirit S. Parikh 

2.1. Reducing greenhouse gas emissions 

Even before the Paris COP1 in 2015, India had declared its intentions to 
reduce its emissions intensity by 30–35% by 2030 (compared to 2005), and 
to increase the share of non-fossil power generation in the total installed 
capacity to 40% by 2030. The Planning Commission set up an expert group, 
which I chaired, to examine the low-carbon strategy for inclusive growth 
(LCSIG). The LCSIG reports (Parikh, Chawla, and Pande 2011; Parikh et al. 
2014) suggest various measures to reach these goals: promoting energy 
efficiency in households, industry, transport, and buildings; emphasizing 
solar and wind; and substituting imported fuels with locally sourced ones. 
Subsequently, the government has stepped up its goal to installing 175 GW 
(gigawatt) of renewable energy capacity consisting of small hydro projects, 
biomass gasifiers, biomass power, urban and industrial waste power, and 
solar and wind energy by 2022.  

At the end of March 2020, the share of renewable energy capacity was 
around 23.5% of the total generating capacity of 370 GW (Ministry of 
Power 2020). The share of renewable resources in the energy mix in 2018–
19 was less than 8.5%, as renewable resources such as solar and wind do 
not generate electricity round the clock. Nevertheless, the growth of 
renewable capacity indicates that India will reach its target of 175 GW 
perhaps a year or two after 2022. India is also pushing for importing nuclear 
power. Unfortunately, the construction of nuclear plants takes a long time 
and is, therefore, expensive. Private foreign investments in nuclear plants 
also face issues of liability. 

2.2. Measures for inclusive growth 

The goal of inclusive growth is considered non-negotiable by India’s policy-
makers and many in the civil society, and thus it demands the highest 
priority. For this, a projected 1 kWh of electricity per day per household, six 
liquified petroleum gas (LPG) cylinders per year per household, 100% 
access to electricity and clean water, pucca (durable) houses, education, and 
health services for all are to be made available by 2030. This has been the 
goal of both the present and previous governments. Using their top-down–
bottom-up model, which maximizes private consumption and provides all 
these benefits by increasing government expenditure and supplementing 
income transfer, Parikh et al. (2013) have shown that inclusive growth does 
not have to sacrifice economic growth.  

                                                        
1 Conference of Parties signatory to the UN Framework Convention on Climate Change 
proposed at the Earth Summit in Rio de Janeiro in 1992. 



Ecology, Economy and Society–the INSEE Journal [22] 

The Government of India launched the Rajiv Gandhi Grameen 
Vidyutikaran Yojana (RGGVY) in April 2005 to provide electricity to rural 
households. The goal was to electrify 1.10 lakh unelectrified or de-
electrified villages and provide free electricity connections to 2.3 crore 
below poverty line (BPL) households. By April 2012, 1.05 lakh villages had 
been electrified and free connections had been given to 1.95 crore BPL 
households. The Modi government stepped up the programme under the 
name of Deendayal Upadhyaya Gram Jyoti Yojana to connect all 
households and provide stable electricity supply to all by 2019. While nearly 
100% of households are now connected, the quality of supply needs to be 
improved.  

Along with access to electricity, clean cooking fuels are equally important 
for well-being. The use of dung, firewood, and agricultural waste as cooking 
fuel causes severe indoor air pollution, which cause millions of premature 
deaths annually in India. Smith (2000) estimated that approximately 0.4–
0.55 million deaths resulted due to this cause in the late 1990s. The IEP 
emphasized the importance of clean cooking fuel in its 2006 report. In 
2001, only 11% of households used LPG (6% rural; 17% urban); this 
increased to 29% in 2011 (12% rural; 66% urban). The IEP recommended 
the provision of six LPG cylinders per household per year and a subsidy 
through smart cards as direct benefit transfer (DBT)—this is now the 
accepted mode as the Modi government has increased the ease of DBT 
through the expansion of JAM (Jan Dhan, Aadhar, Mobile) (Government 
of India 2016). LPG customers increased from 137 million in 2011–12 to 
257 million in 2017–18 (PPAC 2018). This rise has increased the import of 
LPG from 5.8 MT in 2011–12 to 13.2 MT in 2018–19.  

2.3. Measures for increasing energy efficiency and security 

Increasing energy efficiency means using less energy to produce the same 
output. Energy intensity in the Indian economy has experienced an annual 
improvement of almost 3.25% over 2011–12 to 2018–19 (MOSPI 2020 
Table 6.3) with a GDP growth of 5.27%, giving energy efficiency of about 
2% per year.  

In the household sector, the substitution of 40 W incandescent light bulbs 
for light emitting diode (LED) bulbs that provide the same amount of light 
with electricity consumption of only 7 W can save energy. As of 31 March 
2020, the Ministry of Power’s National Ujala Dashboard reported that more 
than 36.2 crore LED bulbs had been distributed to households in the 
country, with estimated savings of 47 billion kWh per year and emissions of 
38 MtCO2 per year (Ministry of Power n.d.). The appliance labelling 
programme, under which appliances are rated with one (least efficient) to 



[23] Kirit S. Parikh 

five stars (most efficient) depending on their energy efficiency, has the 
potential to reduce energy consumption by 13–40% by 2030 (Parikh and 
Parikh 2016).  

To promote energy efficiency, the Bureau of Energy Efficiency (BEE) was 
set up within the Ministry of Power in 2002 under the Energy Conservation 
Act of 2001. The Perform, Achieve, and Trade (PAT) Scheme sets targets 
for energy reduction in specific industrial units of energy-intensive 
industries. The Energy Conservation Building Code (ECBC), launched by 
the Ministry of Power in May 2007 to make commercial buildings energy 
efficient, has been made compulsory for the building sector in many states. 
Parikh et al. (2014) have projected a reduction of 131 MT of CO2 emissions 
in 2030, which comprises 10% of emissions from commercial buildings. 
These savings are in addition to savings from energy-efficient equipment. 

Energy use in the transport sector can also be reduced if a large share of 
freight traffic is shifted to the railway sector. To move one tonne over one 
kilometre, a truck consumes five to seven times the diesel a train would. 

Moreover, railways have been losing their freight share, as trucks provide 
secure, on-time, and door-to-door service. To encourage freight movement 
by train, two dedicated freight train corridors are under construction: one 
between Mumbai and Delhi, and the other between Punjab and West 
Bengal. Four others are still in the planning stage. Train corridors such as 
these can replace freight movement by road while significantly reducing 
energy consumption. 

Even for coal-based power, the Government of India has mandated that all 
new power plants should be supercritical, which means that they should 
generate steam at a higher temperature and pressure and use 10–15% less 
coal per kWh compared to subcritical plants.  

2.4. Measures to increase energy security 

Efforts to increase the domestic production of oil and gas have not been 
very successful; our domestic production of crude oil has ranged between 
32–35.9 MT over the last 20 years (PPAC n.d.[b]). Thus, the best option at 
hand is to substitute petroleum products with domestic energy sources such 
as biofuels and/or electricity. The main thrust of government policies is the 
electrification of railways and the promotion of electric vehicles. Due to the 
cost of batteries, electric vehicles are more expensive today than 
conventional internal combustion vehicles. Based on what they consider 
realistic rates of the penetration of electric vehicles, Parikh et al. (2016) 
estimate that the consumption of petroleum products for road transport in 
2030 will decrease only marginally. Increasing fuel efficiency norms for 



Ecology, Economy and Society–the INSEE Journal [24] 

vehicles would yield a much larger reduction. Of course, the greater use of 
public transport and non-motorized transport such as cycling and walking 
could have an even larger impact.  

 

3. THE WAY AHEAD  

Most projections show that the substantial use of coal will continue. We can 
curb the growth of coal consumption with a significant reduction in the 
cost of solar power and batteries for storing electricity. Thus, we should 
have a technological mission: to bring down the costs of solar PV and 
batteries by 50%. This will render coal power economically obsolete and 
keep our CO2 emissions within the 1.5ºC global warming target (Parikh, 
Parikh, and Ghosh 2018) without any loss of economic growth. 

If coal has to be used, then to curtail air pollution, we should insist on the 
installation of modern electrostatic precipitators to trap 2.5 micron 
particulates in all new plants as well as the retrofitting of old plants. Coal 
plants should have flue-gas desulphurization (FGD) and selective catalytic 
reduction that can substantially eliminate SOx and NOx pollution. They do, 
however, cost more, but the additional cost would be most likely less than 
the cost of the health impact of air pollution.  

The COVID lockdowns have shown that air quality can improve. The use 
of electric vehicles, public transport, cycling and walking, clean Bharat 
Standard-6 fuel as well as increased vehicle fuel efficiency and can cut down 
air pollution in cities. We can indeed have an energy future that is clean and 
sustainable.  

 

REFERENCES 

Government of India. 2016. ―Spreading JAM across India’s Economy.‖ In Economic 
Survey 2015–16, edited by Arvind Subramanian, 50–67. New Delhi: Government of 
India. 

Ministry of Power. 2020. ―National Ujala Dashboard.‖ Accessed on March 31, 
2020. http://www.ujala.gov.in/.  

MOSPI. 2020. Energy Statistics 2020. New Delhi: Ministry of Statistics and 
Programme Implementation, Government of India. 
http://www.mospi.gov.in/sites/default/files/publication_reports/ES_2020_24042
0m.pdf. 

Parikh, Jyoti K., Probal Ghosh, Vinay Saini, and Rajat Puri. 2016. ―Modelling 
Studies on Greenhouse Gas Emissions and Emissions Intensity of Indian 
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http://www.ujala.gov.in/
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[25] Kirit S. Parikh 

Parikh Kirit S., Arunish Chawla, Chandrajit Banerjee, Anshu Bharadwaj, Indrani 
Chandrasekhran, Rita Roy Choudhury, Nitin Desai, Jamshyd N. Godrej, Pavan 
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Parikh, Kirit S., Arunish Chawla, and Varad Pande. 2011. ―Interim Report of the 
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Parikh, Kirit S. and Jyoti K. Parikh. 2016. ―Realizing Potential Savings of Energy 
and Emissions from Efficient Household Appliances in India.‖ Energy Policy 97 
(October): 102–11. http://dx.doi.org/10.1016/j.enpol.2016.07.005. 

Parikh, Kirit S., Jyoti K. Parikh, and Probal P. Ghosh. 2018. ―Can India Grow and 
Live Within a 1.5 Degree CO2 Emissions Budget?‖ Energy Policy 120 (September): 
24–37. https://doi.org/10.1016/j.enpol.2018.05.014. 

Parikh, Kirit S., Jyoti K. Parikh, Probal P. Ghosh, and Gayatri Khedkar. 2013. 
―Low Carbon Development Pathways for a Sustainable India.‖ New Delhi: IRADe 
and WWF. 

Parikh, Kirit S., Surya P. Sethi, J.L. Bajaj, Pradeep Chaturvedi, Rangan Banerjee, 
Prodipto Ghosh, H.C. Gupta, Anil Kakodkar, Ajit Kapadia, Amit Mitra, et al. 2006. 
―Integrated Energy Policy: Report of the Expert Committee.‖ New Delhi: Planning 
Commission, Government of India. 

Petroleum Planning & Analysis Cell (PPAC). 2018. ―LPG Profile (Data on LPG 
Marketing) as on 01.01.2018.‖ New Delhi: Ministry of Petroleum and Natural Gas. 
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1Jan2018.pdf. 

PPAC. n.d.(a). ―Import/Export.‖ Last modified May 25, 2020. 
https://www.ppac.gov.in/content/212_1_ImportExport.aspx. 

PPAC. n.d.(b). ―Production.‖ Last modified May 25, 2020. 
https://www.ppac.gov.in/content/146_1_ProductionPetroleum.aspx.  

Smith, Kirk R. 2000. ―National Burden of Disease in India from Indoor Air 
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https://doi.org/10.1073/pnas.97.24.13286. 

 

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