Economic Reforms and Changes in Energy Consumption in India: A Structural Decomposition Analysis

India's economic reform was initiated in mid 1991 by the Government of India. Some strategies for energy sector were adopted. This paper investigates the pattern of energy consumption changes during reform period i.e., 1991-92 to 1996-97and various factors responsible for these changes based on Input/Output model. Here we develop a Structural Decomposition Analysis. Six different factors have been identified here: (i) Technical changes, (ii) Changes in final demand structure, (iii) Changes in the interaction term of technical changes and final demand structure, (iv) Changes in energy exports, (v) Changes in energy imports, (vi) Changes in energy change in stock. Then we separate technical changes and final demand structure again, which explain the energy consumption changes. The most significant role as revealed from the empirical results have been played by the final demand structure, technical changes and interaction term between final demand structure and technical changes.