New Delhi, Jan 6: The government on Tuesday said that rising electricity consumption is emerging as a key driver of India’s economic growth and industrial expansion, underlining its central role in achieving the vision of Viksit Bharat and positioning the country as a global economic power.
According to official data, industrial electricity consumption has increased significantly over the past four years, rising from 320 billion units (BU) in FY21 to about 418 BU in FY25, registering a compound annual growth rate (CAGR) of around 7 per cent. The growth reflects expanding industrial output, improved productivity and rising economic activity across sectors.
The government said initiatives such as the Revamped Distribution Sector Scheme (RDSS) have strengthened power distribution infrastructure and improved supply reliability, helping meet the growing demand from industries and supporting sustained growth in electricity consumption.
Industrial growth, particularly in sectors such as manufacturing, steel, cement, electronics, electric mobility and green hydrogen, remains heavily dependent on reliable and affordable power supply. Increased electricity availability is expected to further strengthen flagship initiatives like Make in India and Atmanirbhar Bharat, enhance global competitiveness and attract foreign investment.
During FY23 to FY25, industrial power consumption grew at a CAGR of about 5 per cent, while electricity consumption by commercial consumers rose faster, recording a CAGR of nearly 10 per cent, increasing from 116 BU to 140 BU. This trend indicates sustained demand from both manufacturing and services sectors.
Officials noted that while a strong monsoon and record rainfall temporarily affected demand in certain consumer goods segments, structural reforms and economic recovery are expected to drive renewed growth. The rollout of GST-related reforms, coupled with rising consumer aspirations and energy transition initiatives, is likely to support higher electricity demand going forward.
The government also highlighted a sharp increase in open access electricity procurement by industries. In FY25, open access consumption rose from 32.5 BU to 43.2 BU, a year-on-year growth of over 32 per cent. The trend has continued in FY26, with consumption during the first half rising by over 45 per cent compared to the same period last year.
Captive power consumption by industrial and commercial users also increased, rising from 176 BU in FY23 to 196 BU in FY25, reflecting growing self-reliance in meeting energy needs.
Domestic electricity consumption saw accelerated growth, rising by 9.8 per cent in FY25, driven by urbanisation, higher appliance usage and improved electrification. States such as Uttar Pradesh, Haryana, Rajasthan, Punjab, West Bengal, Bihar and Delhi contributed significantly to this increase.
The government said that aligning electricity demand growth with renewable energy expansion will support sustainable development and strengthen India’s global leadership in climate action, while ensuring inclusive economic prosperity.
