Regional modeling is essential for assessing the impacts of environmental policies in countries with significant regional diversity. It is particularly important for a resource-constrained state like Kerala (India), which depends heavily on electricity imports from other states. The novelty of this study lies in the development of a state-level Integrated Assessment Model (IAM) that links a recursive multi-regional dynamic computable general equilibrium model with a bottom-up energy model, considering region-specific parameters. To the best of our knowledge, such a state-level regional modeling framework for India has not been developed in the existing literature, thereby addressing an important research gap in assessing region-specific pathways and policy impacts. This paper explores the economic and employment implications of the green transition for Kerala. The contributions to the literature are (a) regional modeling; (b) a framework and assessment of the impact of green transition considering the interlinkage between the state, the rest of India, and the rest of the world; and (c) estimation of required investment and effect on employment generation. The findings suggest that reducing fossil electricity imports without expanding renewable energy infrastructure may constrain economic growth (Policy Scenario 1). In contrast, investments in local renewable energy capacity through revenue recycling, along with improvements in energy efficiency and productivity (Policy Scenario 2), can enhance economic returns and generate more employment. There is an increase in real state domestic product, consumption, investment, returns to factors, and employment in Policy Scenario 2 as compared to the baseline and Policy Scenario 1. Both final energy requirement for fossil fuel and emissions are also lower in Policy Scenario 2. Energy efficiency can be enhanced through investments in efficient technologies, smart grids, low-emission transport systems, and modern energy infrastructure. Productivity improvements require skill development, innovation-oriented policies, and support for entrepreneurship. Green transition also presents an opportunity for Kerala to strengthen energy security through the expansion of renewables. Received: 28 July 2025 | Revised: 11 May 2026 | Accepted: 22 May 2026 Conflicts of Interest The authors declare that they have no conflicts of interest to this work. Data Availability Statement Data are available from the corresponding author upon reasonable request. Author Contribution Statement Sanjib Pohit: Conceptualization, Writing - original draft, Writing - review &editing, Supervision, Project administration. Chetana Chaudhuri: Conceptualization, Validation, Formal analysis, Investigation, Resources, Writing - original draft, Writing - review & editing. Anindya Bhattacharya: Conceptualization, Writing - original draft, Writing - review & editing, Supervision, Project administration. Somya Mathur: Methodology, Software, Visualization. P L Beena: Conceptualization, Supervision. Devender Pratap: Methodology, Software, Data curation. Mohit Kumar Meena: Methodology, Software, Visualization. Hrushikesh Mallik: Resources. Ritika Jain: Resources. Malavika Thampi: Data curation.

India's commitment to achieving net-zero emissions by 2070 requires state-level strategies for low-carbon economic transitions. This study develops a state-specific macroeconomic framework linked to an energy system model to assess the investment needs and employment impacts of decarbonization. Focusing on Odisha, an eastern coastal state producing 23% of India's coal and 44% of mineral output, with a high industrial GDP share, we construct a 49-sector computable general equilibrium (CGE) model and soft-link it with a bottom-up MESSAGEix model. Studies utilizing integrated CGE-MESSAGEix models at the subnational or regional level in India remain limited. The integrated approach evaluates the economic and employment impacts of alternative low-carbon pathways, capturing inter-sectoral and national-global linkages. The findings indicate that fossil-fuel taxation with revenue recycling and renewable energy investment, if applied in isolation, may dampen growth. However, combining renewable energy development policies with energy efficiency and productivity gains mitigates adverse effects, supporting a sustainable transition. In the policy scenario, while coal sector jobs decline, overall employment rises, highlighting opportunities for a just transition in resource-dependent states.

The social accounting matrix (SAM) for India was historically constructed based on the input-output table (IOT). However, since 2011-2012, the Government of India has been publishing the supply-use table, instead of the IOT. While the erstwhile IOT, published by the Government of India, had the same number of products and industries, the supply-use table provides one 'supply matrix' and one 'use matrix', each of which is a rectangular table with 140 products and 66 industries (for 2018-2019). Converting the supply-use table to a square IOT and subsequently extending it to SAM require the utilisation of various data sources, numerous steps and adjustments. Despite the usefulness of both IO and SAM matrices in macroeconomic policy design, not much literature is available on these. This study aims to bridge the gap by constructing IOT and SAM for India from the supply-use table incorporating information from many other sources and describing the method of construction of the matrices. Our IO and SAM also focus on various energy sectors, including different sources of power generation, biomass and so on, and disaggregate energy-intensive sectors like cement or aluminium, considering the immense usefulness of the energy-extended macro-structure to the research of energy and environment policies. The study focuses on the construction of a 59 x 59 SAM for India, with the base year of 2021-2022 incorporating three factors of production and ten categories of households. As an application of the newly constructed SAM, we have analysed the employment implication of India's Nationally Determined Contribution emission commitments.JEL Codes: E16, C67, D57

Abstract As India has embarked on the journey of fulfilling the net-zero emissions target by 2070, the states of India are steering up too to meet the target. The per capita emission for Kerala is low in comparison to national average. Energy sector is the main contributor of the GHG emissions in Kerala. A major share of 76 per cent of electricity power is purchased from other states. When other states undergo energy transition, availability of imported electricity may be e a challenge for Kerala. Hence the State needs to harness its own potential for renewable energy sources and also incorporate improved technologies leading to energy efficiencies in all sectors of the economy to save energy and thereby have lower carbon footprint. The state is gearing up to traverse through low carbon pathways by way of strategies for mitigation, adaptation and sector specific policies for abatement of GHG and air pollutants and for the promotion of Electric Vehicles policy. Naturally these transitions involve adoption of some technologies with their underlying financial costs. Hence it is crucial to understand the fiscal burden vis-a-vis the benefits of each policy intervention as an alternative low carbon pathway. Only by incorporating the behavioural aspects of economic agents, relevant energy technological innovations interplaying with the markets and prices in the economic system, a well coherent energy transition pathway can be developed. Accordingly this paper has undertaken the integrated modelling (approach with the primary objective of quantifying the gains and losses of low carbon transition and their financial implications. The integrated modelling approach involves soft linking of the macroeconomic top-down CGE model and bottom-up (Messageix) energy model. The top-down macroeconomic CGE model used for integration is multi-sectoral, multi-regional (Kerala, Rest of India and Rest of World) variant of GTAP Power model that has a detailed power sector. The CGE model produces forecasts of sectoral output and prices of the BAU and policy scenarios. These CGE results were fed as exogenous input demand projections into the Messageix model, which is an Energy Optimization model. These projected demands are met by supplies subjected with least cost optimizations and other policy constraints such as environmental constraints, resource constraints, capacity constraints, etc., taken into consideration. The model provides technology-based decisions in each of its sectors in terms of cutting down of emissions, and the cost of implementation of those pathways in a given period of time. The integrated model is recursively dynamic model with multiple periods of time to simulate changes as per policy targets of short, medium and long term for low carbon pathway of Government of India. In this paper, we have undertaken policy scenario in which (i) the imports of fossil based electricity from other states of India is restricted into Kerala, (ii) 50 per cent of the existing potential of renewable electricity by various modes is achieved in Kerala and Rest of India, (iii) concomitantly energy efficiency in all energy sectors is increased to the tune of 2.5 percent per annum along with 1 percent total productivity growth per annum in all sectors of the Kerala and India’s economy. Our results show that reduced import of fossil-fuel electricity without any policy intervention to strengthen renewable energy sector would hamper growth. On the other hand, investment on renewable energy to facilitate complete energy transition with self-reliance of energy for the state would expand the economy, would increase the returns to the factors of production, and also escalate employment. The key message that comes out from our simulation is that energy transition towards renewable energy will not take place without complementarity support polices towards this sector. There is a need for the government to play a key role in effecting the change. Also, it is not pragmatic to augment capacity of renewable capacity as far as possible. Depending on imported electricity may be a risky proposition if other states face bottlenecks in transition process towards renewable electricity. Also, it is very important to focus on improvement in energy efficiency in all the sectors. If all these factors are taken into consideration (policy simulation 3), we find that there will be substantial fall in per capita emissions in Kerala. With the change in fuel mix in favour of green sources of energy there has been a sharp fall in emissions from oil sources. Our observation is that energy transition may be a win-win situation in the sense that growth and employment creation may be positive with suitable policy intervention. It must be mentioned that the paper has focused only on energy sector. The developed model may be used in future to focus on the economic implication of other polices, like carbon sequestration etc.

With increased focus on achieving the target of net-zero emission by 2070, Government of India is exploring different pathways of energy transition. The effect of such transition is not only limited to energy sectors but would have effect on employment in all sectors of the economy, through the strong interlinkage of energy sector with other sectors. In this paper, we intend to capture the direct and indirect effects of the energy transition on employment through social accounting matrix approach, for three alternative scenarios outlined in India Energy Security Scenarios (IESS) 2047 (Version-3.0), developed by NITI Aayog. Direct and total (direct, indirect, and induced together) employment multiplier for operation and management is estimated for different renewable vis-à-vis fossil fuel sectors. It is found that employment multiplier for renewable energy sources such as solar power generation is more than that of coal. However, employment multiplier for wind is found to be less than coal or gas. Coal being the dominant source of fuel in power generation, has high share in employment within energy sector, and renewable power sector still needs time and efforts to catch up. Considering the present policies in business-as-usual (BAU) scenario and aggressive transition to renewable energy while keeping the economic aspirations under net-zero scenario, our study shows that direct employment generation in energy sector would be similar under BAU scenario and net-zero scenario. In total employment generation, net-zero scenario is found to be more effective.

An economic evaluation of mega projects is very important for taking into account important aspects connected with investment and operation costs, their possible overflows and the fulfilment of the time period intended for the project. But it is also needed for monitoring the impact of the projects on the overall economy and the regional surroundings. The main objective of the present article is the evaluation of a particular mega project, that is, Ratnagiri Refinery and Petrochemicals Limited, by examining the various aspects of economic evaluation using a new methodology for the estimation of the specific impact in the project evaluation.JEL Codes: C67, L71, L74

The growing protectionism globally and the outbreak of a major US–China trade war led Indian exports facing higher tariffs. This article has tried to investigate how India should react to the trade tensions between the two largest economies of the world. This will help policymakers in India to assess the impact of the likely developments and choose between different policy responses. In a bilateral US–China trade war, while both the United States and China stand to lose in terms of GDP, exports and imports, India stands to gain. India stands to lose when the US–China trade war applies also to India, which faces higher tariffs from both. India’s losses increase further when India responds by increasing its tariffs on imports from the United States and China. In fact, reducing own tariffs could be a wiser step. Enhancing productivity measures by raising port efficiency and making trade and transport sector more efficient appear to pay dividend. India gains even more from joining the RCEP-like trading block when the United States and China are indulging in bilateral trade war. Last but not least, US–China trade war seems to affect Asian countries, some positively some negatively. JEL Codes: F13, C68, F14

Since 1991, India’s economic integration with the global economy has significantly increased its dependence on the rest of the world, and this increasing dependence could well be viewed in terms of the rising share of international trade of goods and services in its gross domestic product (GDP).

Globalisation has opened up economic opportunities for developing countries in the form of outflow of value-added services, low-cost raw materials , human resource skills, improved market access for their exports, efficiency gains in their economies through technology transfer and spill-over, and resource re-allocations. Consequently, various developing countries, including India, have increasingly begun to position themselves for greater participation in regional and global markets. It goes without saying that India needs to build its capacity for establishing linkages with global and regional markets for deriving the optimal benefits of engaging with the globalised world. This, in turn, depends on the creation of an efficient logistics system. For this purpose, most of the developed and emerging countries estimate logistics costs on a regular basis, and use performance indicators to measure the efficiency levels of logistics activities. Till now, no attempt has been made to estimate logistics cost of India by the official statistical organisation. Two estimate of logistics cost computed by private bodies are usually quoted when one refers to Indian estimate. However, the methodology of the two needs serious introspection. In this context, this paper makes an attempt to estimate logistics cost of India.

This chapter uses a national computable general equilibrium (CGE) model with regional industries (a hybrid model) to investigate the effects on India of removing or modifying agricultural subsidies which account for about 2.5% of Indian GDP. A third of the subsidies are applied to inputs of fertilizers and electricity to agriculture. The other two-thirds are on production and sales of agricultural products. The deadweight loss associated with the subsidies is 0.20% of GDP. We find that the fertilizer and electricity subsidies contribute most of the deadweight loss and do not contribute to the objective of supporting farm income. If these input subsidies were phased out and replaced with additional production and sales subsidies, then real farm income would be increased by about 4% with no deterioration in the public sector budget, almost no effect on food security, and small increases in GDP and overall welfare. Rather than requiring readers to understand the intricacies of the CGE model, we explain the principal results by back-of-the-envelope calculations invoking familiar mechanisms and identifying key data items and assumptions in our model.

In today’s world, economic climate changes more quickly, and countries realise that globalisation has made the world small and more competitive. Also, customers seek products and services that can respond to their specific needs, and firms make effort to create competitive advantages to keep their profit and market share. All of the above trends lead firms and countries to focus on efficient logistics system. In this context, almost all developed economies and a few emerging economies estimate national logistics cost on a regular basis to understand the efficiency of their logistics system. This article makes an attempt to survey the literature on logistics cost estimation with special emphasis from the perspective of a developing country like India where estimation is a challenge due to limitation of data. JEL Codes: D57, E23, P44

There are growing concerns about inefficiencies in Indian agriculture arising mainly due to agricultural subsidies on production and consumption. The subsidy regime results in lowering of productivity, crowding out of public investment and increasing environmental concerns. The aim of this paper is to produce a quantitative analysis of the economy-wide effects in India of the elimination of agricultural subsidies. We show the effects on industry and macro variables and also trace out the effects on greenhouse-gas emissions from Indian agriculture. The analysis in this paper is based on a dynamic computable general equilibrium (CGE) model in the Centre of Policy Studies (CoPS) modelling tradition. The paper describes the following tasks: (a) Creation with 2007-08 data of a 130 sector dynamic CGE model of India in GEMPACK code. The input-output transactions table 2007-08 for 130 sectors has been sourced from the Central Statistical Office of the Government of India. (b) Update from 2007-08 to 2012-13. The update was done by historical simulation. In this simulation, shocks are applied to a range of observable variables to move them from their 2007-8 values to their 2012-13 values. The model then estimates 2012-13 values for other (unobserved) variables that are consistent with the shocked variables. For example, if we impose the 2012-13 value for overall consumption of food products, the model estimates values for consumption of food products at the more disaggregated level required for the 130 sector model. The result of the historical simulation is to produce a 2012-13 database for the model which is not contradictable by readily available statistics. (c) Revision of the specification of agriculture in the CGE model. The main requirement is disaggregation. This process involves the splitting of Wheat into Wheat North and Wheat Other. The split is important for subsidy analysis because the subsidy rates applying to wheat production in...

The paper investigates how serious will be the impact on India's economy if India were to make a commitment for substantial reduction in CO2 emissions. Such investigation is done also for China. The analysis is undertaken through counter-factual simulations for the year 2001 by developing scenarios in which India and China cut CO2 emissions by a specified percentage and there exists international trading in carbon. The analysis is undertaken with the help of GTAP-E model. The analysis brings out that the cost of meeting emissions reduction commitments for Annex-I countries can be substantially reduced by engaging in block-level or global carbon trading. The simulation results, obtained under the assumptions that both China and India accept the obligation of cutting CO2 emissions between 5 and 15 percent and there is international carbon trading, indicate that emission cuts in China will reduce welfare both under block carbon trading and global carbon trading. For India, on the other hand, there is an increase in welfare by about 0.2 to 0.3 per cent. Going by the simulation results, China and India would voluntarily cut CO2 emissions if profitable international carbon trading possibilities exist. Therefore, besides negotiating for legally binding commitments for emissions reduction, efforts should be directed at developing international markets for carbon.

This article attempts to estimate how India's trade in agricultural products will be affected by tariff reductions according to the tiered formula of the 2008 draft modalities in the Doha round of the World Trade Organisation. The estimates indicate that the reductions in agricultural tariff rates will lead to an increase in India's imports of agricultural products by about 1% and an increase in its exports of agricultural products to the us and us markets by about 2% to 4%. India has probably more to gain from the implementation of tariff cuts according to the tiered formula than to lose from it. However, the overall effect of the tariff cuts on India's agricultural exports and domestic agricultural production would be small

There seems to be no conclusive note on strengthening multilateralism except for the lip service generally paid by the World Trade Organization (WTO) members during their meetings, only to go back and get increasingly involved in their respective regional pursuits. The success of the Doha Development Agenda (DDA) in the Hong Kong Ministerial is crucial for the future growth of the developing countries as well as for good future economic prospects for the developed countries. In case the Asian developing countries would like to adopt a dual strategy of mix of regionalism and multilateralism, they need to adopt a careful approach while treading this path. Small and narrow regional trade agreements (RTAs) can be costly as well as trade diverting. Larger and broader RTAs may be a better option. A Pan-Asian Free Trade Agreement (PAFTA) may be an appropriate response to the Enlarged European Union (EEU) and the Free Trade Area of the Americas (FTAA). Open regionalism through autonomous liberalisation within a pre-fixed period of time is a better option for PAFTA than preferential trade liberalisation.