Posted on by books_adminPosted in Data Insight, Indian Economy, Research

Research Objective:

  1. The Objective is to Find How Strong is the Relationship Between Petroleum Consumption in State and GDP of Indian States.
  2. The Objective is also to Know the Quality of Inter-State Trade Among Indian States (as on 2024) based on GDP Relations.

The Data of Petroleum Consumption in Indian States in 000’s of Metric Tons and GDP of Respective State in Crores for the Duration 2011-12 to 2023-24 is Considered.

Research Approach:

  1. First, at India Level Correlation Between All States Petroleum Consumption and GDP of States is found. (refer Table-1 and Table-2)
  2. Next, Within Each State, Correlation between that Specific State Petroleum Consumption and GDP of State is Find out for the Duration 2011-12 to 2023-24.  (refer Table-3)
  3. Next GDP data of 12 years of all states is Considered and Inter-Item Correlations of GDP Table is Find Out. This indicates the Strength of Trade between Different States of India based on Correlation Coefficient Values (Refer inter item Correlations Table-4; GDP Data Table-2).
  4. Finally, the Interpretation is Written

Table-1: Petroleum Consumption in Different States of India (FY2012-FY2024)

Table-2: Gross Domestic Product of Indian States (FY2012-FY2024)

Table-3: State Wise Strength of Relation Between Petroleum Consumption and State GDP

Research Findings: (Petroleum Consumption and GDP)

  1. From Table-3, We Can Find that for States such as Assam, Himachal Pradesh, Uttarkhand, Jammu & Kashmir, and Haryana, The Strength of Correlation Between Petroleum Consumption and State GDP is Very High (> 0.99). This is because these states are Mostly Dependent on Either Road Transport or They are Having or Using Lesser Rail Network. That is the Reason, in these States The Strength of Relationship between Petroleum Consumption and State GDP is Very Stronger.
  2. Now, Lets Come to India Level, consisting of all States, The Correlation Coefficient Between Petrol Consumption and GDP of States is 0.95604. This indicates very strong relationship of Petroleum Consumption and Growth of GDP. Thus, we can infer that the Petroleum Consumption, Infrastructure, Transportation and Efficiency of Automobile Vehicles are Backbone for any Economy leading to Development. These are Very much Required for Economic Growth and Societal Development.

Table-4: Inter-State Trade Relations (based on GDP Relations)

Research Findings: Interstate Trade Among Indian States):

  1. First of all, One Major Finding is From Table-4, we can observe that all the Correlation coefficients (inter item correlations) are >0.9 (very strong trade relations) among all Indian states. None of the relationships between different states is less than 0.9 strength. This indicates the overall inter-state trade in India.
  2. Now coming to Specifics, Uttar Pradesh, West Bengal and Rajasthan’s Relationship Strengths is <0.99 only in case of 3 states in each of their cases. That means the correlation coefficient is either 0.98 or 0.97 of them with 3 other states. With Remaining all states these three states have very strong business ties (Correlation coefficient value >0.99 in all the cases).
  3. For Example, in case of Uttar Pradesh, only with 3 states, UP has less than 0.99 strength trade relation; those states are Goa, Mizoram and Arunachal Pradesh. The reason could be in these 3 states the majority of Population is non-hindu. For example, Arunachal has 70% non-hindu, Mizoram has 87% non-hindu and Goa has 33% non-hindu population. I was thinking this could be reason for UP not having >0.99 correlation in trade relation with these 3 states. Other reasons also could be there, this is only my assumption, not empirically investigated.
  4. Now, coming to Other Specifics, Mizoram and Meghalaya have Correlation coefficient values <0.99 with 19 different states of India. These two states have Minimal Inter-state trade deals with in India. Reachability, Geographic Terrain could be reasons and also domestic trade is more here to compare with inter-state trade with other states. May be Cultural factors also could the reason for their reservations in trade with other states. This also could be further researched. I am only taking from Research Point of View; based on what data is speaking.
  5. Out of All Indian States, Rajasthan, UP, Tamil Nadu, Gujarat came out to be Good traders with other States in India having stronger relations. For example, UP has Very Stronger Relation with Punjab and Gujarat (Correlation Coefficient Value > 0.999); Next, Rajasthan has Very Stronger Trade ties with Gujarat, Karnataka, Telangana, and Tamil Nadu (Correlation > 0.999). Rajasthan Marvaris have major businesses such as hardware shops, electrical, sanitary shops, and sweet shops in these states.
  6. Coming to Second highest economy in India, Tamil Nadu, Tamil Nadu is doing good Business (correlation >0.999) with Rajasthan, Punjab, Karnataka and Telangana.
  7. Coming to Gujarat, Gujarat has better trade/business with Rajasthan, Bihar, UP and Tamil Nadu (Correlation > 0.999).
  8. Surprisingly, The Largest Economy in India, Maharashtra is not having relationship strength of >0.999 with any of India state. It is doing is good business with all the states; however not very close or more perfect correlation with any Indian states. It is like all-rounder; not focused on specific one or two states.
  9. The above specified relationships in 5), 6), 7) are almost Perfect Correlations with trade between those states.
  10. Another thing is Telangana Trade is More Stronger with Tamil Nadu (Correlation: 0.999053) to compare with Andhra Pradesh (Correlation: 0.998634)

So, Overall we learned that Petroleum Consumption is Very Strongly Correlated to GDP of Indian States and Interstate Trade is also having fairly good/strong relations (Correlation Coefficient Value > 0.9 in all cases among Indian States). Thus Energy Consumption, Infrastructure, transportation network is key for Economic Development and Growth.

Thank You,

All the Best,

Dr.Goparaju Purna Sudhakar

(https://gpsudhakar.com)

Data Sources:

  1. https://www.data.gov.in/catalog/gross-state-domestic-product-current-prices-0
  2. https://www.mospi.gov.in/state-wise-gross-state-domestic-product-gsdp-growth-rates-current-prices-base-year-2011-12
  3. https://ppac.gov.in, Petroleum Planning & Analysis Cell, Govt. of India;
  4. https://mospi.gov.in

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