India has embarked on an ambitious plan to transition its energy sector towards sustainability and resilience. The Nationally Determined Contributions (NDCs) emphasise reducing the emissions intensity of the GDP by 45 per cent by 2030, increasing the share of non-fossil-fuel-based electricity capacity to 50 per cent, and achieving net zero emissions by 2070. This transformative ambition requires structural changes in energy production and consumption, necessitating a shift from coal-dominated energy systems to renewables such as solar, wind and hydro. In 2024, renewable energy sources accounted for only 12.1 per cent of India’s total electricity generation, while coal accounted for 74.4 per cent, remaining the dominant source of electricity due to high power demand and grid reliability concerns (Reuters 2025). The energy transition is expected to have far-reaching implications for employment, economic growth and energy security, making it imperative to assess these impacts comprehensively. Another point to note is that the energy transition may require employees to develop new skill sets as new green technologies are adopted. Manpower planning must take this into account as we increasingly move towards the green energy pathway.
To comprehend the employment implications of this transition, a methodological framework is needed to capture the entire supply chain of energy production/consumption. Only then can one estimate not only the direct employment generation of energy production but also the indirect employment opportunities within the supply chain. To be precise, a framework that traces the entire circular flow of income/output of an economy is essential. A country’s social accounting matrix (SAM) serves this purpose, making it a viable framework for analysing these effects. Recently, we constructed a detailed SAM of India using the recently published Supply Use Table. This 59×59 SAM, with a base year of 2021-22, incorporates three factors of production and 10 household categories. Here, the aggregated electricity sector in India’s Supply Use Table has been disaggregated into different electricity sectors based on their sources of production, namely, Electricity-Nuclear, Electricity-Solar, Electricity-Wind, Electricity-Hydro, Electricity-Gas, Electricity-Coal and Electricity-Other. This is essential to understand the employment effects of the green transition in the electricity sector.
To evaluate the employment implications of India’s updated NDC targets, three policy scenarios have been modelled. The first is the baseline scenario, which considers the continuation of the current energy composition dominated by fossil fuels. The second scenario envisions achieving a 50 per cent share of renewables in electricity generation by 2030. The third scenario accounts for historical disparities between installed capacity and actual output, with renewables contributing 30 per cent to electricity generation.
The implications of India’s environmental policy targets, as demonstrated through the SAM, emphasise the transformative potential of renewable energy adoption on employment and economic structures. Achieving these targets necessitates a shift in energy production patterns, reducing reliance on fossil fuels while scaling up renewable energy capacity. The SAM provides empirical insights into how this transition impacts direct and total employment across sectors.
In the modelled scenarios, transitioning to a 50 per cent renewable energy share in electricity generation by 2030 substantially increases employment opportunities. Direct employment in the energy sector is projected to grow from 3.9 million under the baseline scenario to 4.5 million in the 50 per cent renewable energy scenario. This shift not only creates jobs within the energy sector but also has significant indirect and induced employment effects across the economy. The total employment, which includes these broader economic linkages, is estimated to reach 28.1 million under the 50 per cent renewable energy scenario. Even under the more conservative 30 per cent renewable energy scenario, total employment impacts are substantial, amounting to 25.7 million jobs.
The SAM further highlights sectoral interdependencies and the ripple effects of renewable energy investments. Sectors such as manufacturing, construction and services benefit indirectly from increased demand for renewable energy infrastructure, equipment and associated services. These effects highlight the importance of coordinated policy efforts to maximise the socio-economic benefits of the energy transition. The graph illustrates the differences in direct and total employment across the three scenarios, highlighting the outsized impact of renewable energy investments on job creation. The visual representation underscores the potential for renewable energy to drive inclusive growth, particularly in rural and underdeveloped regions where such investments are likely to have the greatest impact.
The findings underscore the need for supportive policy frameworks that facilitate investments in renewable energy, workforce development and equitable resource allocation. By aligning economic growth with environmental sustainability, India can leverage its energy transition to achieve broader development goals while fulfilling its NDC commitments.
India’s NDCs represent a pivotal opportunity to transform its energy sector, reduce emissions and foster inclusive growth. However, achieving these targets requires coordinated efforts, including investments in renewable energy infrastructure, workforce training and policies that ensure equitable access to resources and benefits. The study underscores the critical role of supportive policies in facilitating this transition, highlighting the importance of financial incentives, regulatory frameworks and public-private partnerships in driving renewable energy adoption.
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