Uplifting India from severe energy poverty accounting for strong asymmetries: Do inclusive financial development, digitization and human capital help reduce the asymmetry?

Securing seamless access to power in emerging territories like India is a prerequisite for attaining steady-state economic development and enhancing societal upliftment. Therefore, policymakers and power stakeholders face the pressing need to identify new factors that can effectively alleviate energy poverty, particularly in the context of increasing financial globalization and digitization. While previous studies have examined the linear relationship between fuel poverty and its determinants, there is a lack of research focusing on the nonlinear association. The present work, therefore, explores the asymmetric consequences of financial development (FD), digitization, and human capital on fuel poverty in India while controlling for the consequences of economic growth (GDP), trade, and natural resource rent. To accomplish this, we adopt innovative methodologies, including Wavelet Quantile Correlation (WQC), Quantile-on-Quantile regression (QQR), and Quantile Causality (QC), leveraging data spanning from 1990Q1 to 2021Q4. The results from WQC and QQR approaches underscore that financial development, human capital, GDP, and digitization share a strong asymmetric association with energy poverty and that excessive financial development and digitization foster energy poverty issues in India. Human capital and trade do not help reduce energy poverty when energy poverty appears to be extreme. However, natural resources help reduce fuel poverty. Our findings corroborate that moderate financial development and digitization growth can help uplift India from this social crisis of fuel poverty. As such, Delhi should focus more on absorbing the negative spillovers induced by augmented financial development and digitization and control for other subsidiary elements that share close contact with financial development and digitization. Besides, Delhi must foster human capital development before the energy poverty issue peaks.