RANJAN, RAHUL (2017). 'A Re-examining the Nexus of Energy Inequality and Energy Poverty in India: Evidence from NSS Data' Paper presented at the annual conference of the HDCA, Cape Town 2017.
In the last six decades, energy sector has been greater developed in India. Government of India has been implementing many energy programmes to electrify the villages and make more accessible to modern energy, but still the accessibility of modern energy is a major concern in India. Income of a household is one of the important factors, which predominantly determines the expenditure pattern of a household. Energy, being an important component of a household expenditure, is very much essential to know income and domestic expenditure pattern of the households. Thus, the demand of energy is associated with the Income. The lowest income group consumes half the energy consumed by the highest income group. The energy consumption among the lowest and highest income group is less skewed in the rural areas as compared with the urban areas. Households shift their cooking energy patterns after a threshold level of income. After increase the income, a number of households still use traditional energy for cooking due to taste preferences and the familiarity of cooking with traditional technologies. In India many wealthy households retain a wood stove for baking traditional breads. As incomes increase change the fuel mix but wood is rarely completely excluded. But this is not true with lighting. Households entirely shift the energy pattern for lighting as income increase. This fact is established by NSS consumption expenditure rounds over the period of time.
This study examines the nature and trend of energy inequality and energy poverty at household level in India in last two-decade analysis. From 1987-88 to 1999-00 is considered the first decade and 1999-00 to 2011-12 is the second decade of the study. For that, three rounds of National Sample Survey (NSS) Consumption Expenditure are used in the study, which are: 43rd round (1987-88), 55th round (1999-00) and 68th round (2011-12).
Energy poverty and energy inequality is a major concern for energy policy, in particular rural energy policy maker because of its adverse effects on household productivity and human well-being. Access to electricity and modern fuels have been increasing at the household level over the couple of decades but it is still not a satisfactory stage. More than 412 million people do not have access to electricity in India. A recent study of Govt. of India indicates that 668 million people still totally rely on traditional sources of energy which is expected to decline to 395 million people by 2030. In 2014, World Health Organization (WHO, 2014) highlights that the use of traditional energy sources for cooking and heating causes over 4,00,000 premature deaths every year in India, mostly they are women and children. The high reliability of traditional energy sources raises the question about subsidies is given on LPG and kerosene particularly in the rural areas. It is useful to restate the matter as IEA (2007) sees it “the current subsidy scheme benefits most richer households, mainly in urban areas, and has, for the most part, failed to shift fuel consumption patterns away from biomass in poor households. It is estimated that 40% of the subsidies for LPG and kerosene go to the richest 7% of the population”.
NSS data on consumption expenditure highlights that 118 kg of firewood &chips and only 8.69 kg of LPG are used by rural households for cooking purpose in comparison to 12.34 kg of LPG are used by urban households in a month in 2011-12. Per capita consumption of LPG in rural and urban areas is 1.80 kg and 2.56 kg in a month respectively. This figures indicate that rural households do have only limited access to modern/clean energy in compare to urban households, which supported by the facts that about 15% of households in rural areas and 67% households in urban areas, have access to cleaner cooking fuels. Therefore, inequality is high in rural in terms of LPG consumption than urban. The high inequality in terms of LPG consumption in rural areas indicates that the variation of LPG distribution across rural villages. Still some remote village’s households or hills area households do not have LPG connection. In rural areas fuel stacking hypothesis is existed which refers to use a combination of energy sources for their energy requirements especially for cooking although they are capable to get access in rural areas. Even income quintile has different energy requirements and they usually prefer to use modern energy rather than unclean energy. At the bottom level income quintile demand less energy because of they have fewer appliances in comparison to top income quintile have more appliances which further create extra energy demand. The extra energy demand will be converted into more expenditure on energy. The demand for modern energy is associated with income of the households and high energy inequality is existed in urban areas. Therefore, inequality is high for electricity consumption and total energy expenditure in urban areas.
This paper also critically examines the various methods for estimating the energy poverty in India. All methods suggest that energy poverty was sharply declined in India in the period 1999-00 and then suddenly increased in 2011-12. However, there is no universal accepted method to measure energy poverty. Every method has some conceptual problem which needs to be revised carefully.