IIT Madras, International Researchers, propose solutions to pollution problems of manufacturing firms

The researchers studied the manufacturing sector of the Indian economy using data from the ‘Prowess IQ’ database of the Centre for Monitoring the Indian Economy from 2001 to 2015.

IIT Madras, International Researchers, propose solutions to pollution problems of manufacturing firms

Indian Institute of Technology (IIT) Madras researchers have collaborated with International Researchers to find possible solutions to the productivity and pollution problems of manufacturing firms in India. The researchers studied the manufacturing sector of the Indian economy using data from the ‘Prowess IQ’ database of the Centre for Monitoring the Indian Economy from 2001 to 2015.

On the basis of econometric analysis, the research suggested that a green domestic policy mapped with FDI and trade to increase productivity and energy efficiency for the manufacturing sector in India. Other Key Findings include 1. One-to-one correspondence and linkages between tax and energy intensity will promote renewable energy.2. Firms that are improving energy efficiency can be either given tax credits or tax exemptions as rewards. 3. There is an urgent need to replace vintage capital and adopt new technology.

As pollution-intensive industries and firms are more likely to be attracted by lax environmental policy, ‘Performance, Achievement and Trade’ policies need to focus on these firms. Additionally, as firms in pollution-intensive industries seem to prefer to relocate to pollution havens rather than innovate, assisting these firms in improving their energy efficiency and reducing their pollution can help them gain legitimacy and maintain their business, the press release stated.

The researchers further concluded that the positive spillovers from export participation and foreign direct investments could help the Indian economy and increase energy efficiency in the manufacturing sector. A sustainable energy policy targeting the manufacturing industry is essential for the Indian economy to contribute to green and sustainable development.

This research was led by Dr. Santosh Kumar Sahu, Assistant Professor of Economics, Department of Humanities and Social Sciences, IIT Madras, and included Mr. Prantik Bagchi, Research Scholar, Department of Humanities and Social Sciences, IIT Madras, Chennai. The International research partners include Prof. Ajay Kumar from EMLYON Business School, Ecully, France, and Prof. Kim Hua Tan from Nottingham University Business School, U.K.

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