India’s ‘space economy’ valued at ₹36,794 cr

by

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 crores (approximately $5 billion) for 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 crores) 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 a 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 crores in the previous fiscal. The estimated size of the space economy shrunk from ₹43,397 crores in 2018-19 to ₹39,802 crores in 2019-20 and ₹36,794 crores 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.

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

The CDS-IIST research project has coincided with the new Central government policies opening up the sector to private players. These policies, according to the authors, are very likely to enlarge the size of the sector through enhanced private investment and improved integration with the global private space industry.

The study is a first-time attempt at scientifically measuring the size of the space economy.
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.

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. (The Hindu)