Electricity shortages and industry: Evidence from India
Hunt Allcott, Allan Collard-Wexler, Stephen D. O’Connell have a research article on impact of electricity shortage on Indian industry:
In many countries, electricity supply is cited as a primary impediment to firm growth and productivity. This column assesses the effect of endemic electricity shortages on Indian manufacturers. The average reported level of shortages reduces annual plant revenues and producer surplus of the average plant by 5-10%. While the complete elimination of shortages may not be plausible in the near term, simulations show that interruptible retail electricity contracts could substantially reduce the impact of shortages on manufacturers.
While shortages might substantially affect manufacturing output in the short-run, our estimates explain little of the manufacturing productivity gap between India and more developed countries. An alternative contract regime would allow manufacturers to sort into allocatively efficient shortage levels, substantially reducing aggregate losses from shortages requiring neither large-scale energy sector reforms nor long-term elimination of shortages.
It is difficult to believe such research. For all you know, electricity should be impacting Indian industry pretty badly. But it does not show in numbers. May be there is some catch to the story..