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

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

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

A collaboration between two leading research and education institutions in Thiruvananthapuram has shed interesting light on India’s “space economy,” whose exact outlines have remained largely vague even as the country’s space program grew by leaps and bounds.

In a first attempt to measure the size of the Indian space economy, researchers from the Center for Development Studies (CDS) and the Indian Institute of Space Science and Technology (IIST) came up with a figure of ₹36,794 crore (about $5 billion) for fiscal year 2020-21. The estimated size of India’s space economy, as a percentage of GDP, has fallen 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; VK Dadhwal, until recently Director of IIST; and Shaijumon CS, associate professor of economics, IIST, were the subject of a webinar Saturday.

Using internationally accepted frameworks, the authors examined the annual budget for the space program and its components; space production, operations and application. According to the paper, space applications accounted for most of this evolving economy, accounting for 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%.

According to the study, budgetary spending on space has a major impact on the dynamics of the space economy. India’s space economy has evolved significantly and now accounts for about 0.23% of GDP on average (over 2011-12 to 2020-21). We also notice a decrease in the budget for space-related activities, which has caused the economy to shrink over the past two years,” says Prof. Mani. Budget expenditure in 2020-21 was ₹9,500 crore, shrinking from ₹13,033.2 crore in the previous fiscal year. The estimated size of the space economy shrank 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 GDP declined 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 expenditure is higher than that of China, Germany, Italy and Japan, but lower than that of the US and Russia.

Though it has limitations, the study is nevertheless a first attempt at scientifically measuring the size of the space economy, said Dr. Shaijumon. Prof. dr. Mani cited the inability to gauge 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 the space economy on the Indian economy itself. The impact is both direct and indirect”, says Prof. Mani.

For the current study, the authors relied on Indian Space Research Organization (ISRO) and Parliamentary documents, the Comptroller and Auditor General’s (CAG) reports, intellectual property rights data, and other government data, in addition to Scopus-indexed space publications.

The CDS-IIST research project coincided with the new central government policy to open up the sector to private players. These policies are very likely to increase the size of the sector, the authors say, through increased private investment and better integration with the global private space industry.


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