IIT Madras partners with international researchers to give suggestions for productivity, pollution issues of Indian firms

IIT Madras has collaborated with international researchers to offer solutions to concerns like productivity and pollution in Indian manufacturing firms.

To develop possible solutions to the productivity and pollution problems of manufacturing firms in India, researchers from IIT Madras partnered with international researchers and studied the Indian economy’s manufacturing sector by utilising the data from the ‘Prowess IQ’ database of the Centre for Monitoring the Indian Economy from 2001 to 2015. The research resulting from the partnership recommends a green domestic policy that is mapped with FDI for increasing productivity and energy efficiency for the Indian manufacturing sector.

One-to-one correspondence and linkages between tax and energy intensity will promote renewable energy.Firms that are improving energy efficiency can be either given tax credit or tax exemption as rewards.There is an urgent need to replace vintage capital and adopt new technology.

The collaborative study has crucial policy implications in reference to global climate change regulations as an increasing number of cap-and-trade emission trading systems are also being implemented around the globe.

As pollution-intensive firms are more likely to be drawn by permissive environmental policies, 'Performance, Achievement, and Trade' programs should target these businesses.

Additionally, as firms in pollution-intensive industries seem to prefer to relocate to pollution havens rather than innovate, helping these firms to enhance their energy efficiency and reduce their pollution can help them gain legitimacy and maintain their business.

The researchers have further found out that positive spillovers from export participation and FDIs have the potential to help the Indian economy raise energy efficiency in the manufacturing sector.