Study values India’s ‘space economy’ at ₹36,794 crore in 2020-21

‘India’s space economy has evolved considerably and now accounts for about 0.23% of the GDP’

A collaboration between two premier research and educational institutions in Thiruvananthapuram has shed interesting light on India’s “space economy”, the exact contours of which have remained largely vague even as the country’s space programme grew by leaps and bounds.

In a first-of-its kind attempt at measuring the size of India's space economy, researchers from the Centre for Development Studies (CDS) and the Indian Institute of Space Science and Technology (IIST) arrived at a figure of ₹36,794 crore (approximately $5 billion) for the 2020-21 fiscal. The estimated size of India's space economy, as a percentage of the GDP, has slipped from 0.26% in 2011-12 to 0.19% in 2020-21, they found.

The findings, outlined in a paper 'The Space Economy of India: Its Size and Structure' by CDS director Sunil Mani; V. K. Dadhwal, till recently Director of IIST; and Shaijumon C. S., Associate Professor of Economics, IIST, were the subject of a webinar on Saturday.

By employing internationally-accepted frameworks, the authors have examined the annual budget for the space programme and its constituents; space manufacturing, operations and application. According to the paper, space applications accounted for the major chunk of this evolving economy, constituting 73.57% (₹ 27061 crore) of it in 2020-21, followed by space operations (₹ 8218.82 crore or 22.31%) and manufacturing (₹ 1515.59 crore or 4.12%).

The budget outlay for space has considerable influence on the dynamics of the space economy, according to the study. ''India's space economy has evolved considerably and now accounts, on an average, for about 0.23% of the GDP (over 2011-12 to 2020-21). We have also noticed a decline in the budget for space-related activities, leading to a reduction in the size of the economy in the last two years,'' Prof. Mani said. The budget outlay in 2020-21 was ₹9,500 crore, shrinking from ₹13,033.2 crore in the previous fiscal. The estimated size of the space economy shrunk from ₹43,397 crore in 2018-19 to ₹39,802 crore in 2019-20 and ₹36,794 crore in 2020-21.

The study also found that the space budget as a percentage of the GDP slipped from 0.09% in 2000-01 to 0.05% in 2011-12, and has remained more or less at that level since then. In relation to GDP, India's spending is more than that of China, Germany, Italy and Japan, but less than the U.S. and Russia.

While it has limitations, the study nevertheless is a first-time attempt at scientifically measuring the size of the space economy, Dr. Shaijumon said. Prof. Mani cited the inability to establish the size of the space-based remote sensing industry as a drawback. ''The next step for us would be to look at the impact of space economy on the Indian economy itself. The impact is both direct and indirect,'' Prof. Mani said.