Electrical Engineering Department, Jadavpur University, Kolkata - 700 032, India. Email: sajal.ghosh@ciionline.org, sajalg@yahoo.combasu_sujay@yahoo.co.in
*Correspondence Energy Division, CII, Plot No. 249-F, Sector 18, Udyog Vihar, Phase IV, Gurgaon — 122 015, India
This paper examines ‘coal consumption—GDP (gross domestic product)’ and ‘gas consumption—GDP’ Granger causality techniques. Augmented Dickey-Fuller tests reveal that all series viz. per capita GDP, per capita coal consumption, and per capita gas consumption, after logarithmic transformation are non-stationary and individually integrated of the order one. This study reveals the absence of co-integration but finds the existence of unidirectional Granger causality running from coal consumption to economic growth and from economic growth to gas consumption in bi-variate vector autoregression frameworks using annual data, covering the period 1970/71 to 2001/02. Thus, lowering the share of coal in the fuel mix would adversely affect India’s economic growth. On the other hand, a growth in the income is found to be responsible for the gas consumption being clean and efficient in nature.
