Why demand for power is surging amid India’s growth slowdown

An almost 7% growth in India’s electricity demand at a time when economic expansion has cooled to its weakest in six years may appear as a paradox at first glance. Clarity emerges with a closer look.

Power requirement growth in the nation’s most industrialized states decelerated in the April-July period, as demand from businesses cooled in line with the broader slowdown in Asia’s third-largest economy. The overall jump in demand, on the other hand, came mostly because of a rise in demand from states that happened to add a large number of households to the electricity network for the first time.

Tamil Nadu and Maharashtra, the nation’s hubs for making automobiles and ancillaries, witnessed demand grow 2.7% and 1.4%, respectively — the slowest growth among large power consumers, data from the government’s Central Electricity Authority show.