Econometric Perspective of the Oil Consumption and Economic Growth Relation in India

This research aims to study the existence and direction of the short-run or long-run relationship between per capita oil consumption and gross domestic product in India. The data from 1965 to 2015 had analyzed by employing the vector error correction model. For the verification of the same result, a standard Granger causality test had performed. The study results have suggested the existence of a long-run relationship and show the direction of changes in gross domestic product cause changes in oil consumption. As a policy implication, economic growth can be considered a policy variable to improve India's oil resources.