Low-Carbon Transition Could Cost Jharkhand INR 725.9 Billion Per Year, CPI Finds

A Climate Policy Initiative study estimates that the low-carbon energy transition could result in economic impacts of INR 725.9 billion per year (approximately USD 8.7 billion) for Jharkhand, a coal-dependent eastern Indian state. The analysis projects an impact on state revenues of 5.1 percent and potential erosion of 7.7 percent of the gross state domestic product.

Jharkhand is one of five resource-rich eastern Indian states — alongside Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal — that together account for approximately 85 percent of India's solid fossil fuel production. The CPI study highlights that the state's economic activity is heavily concentrated in mining and downstream electricity generation, leaving it particularly vulnerable to a low-carbon transition. Stakeholders affected include public sector undertakings engaged in coal mining and power generation, the state government through reduced royalties and tax revenues, workers across the mining and power value chain, communities near project sites, and associated informal livelihoods such as hotels, restaurants, and grocery stores.

India's goal of achieving net-zero emissions by 2070 will require a significant change in the national energy mix, with solid fossil fuel use expected to plateau by the mid-2030s before declining. Jharkhand faces particular challenges as renewable energy installations are more likely to be sited in renewable-rich states, redirecting investment away from coal-dependent regions. Permanent workers may have access to voluntary retirement schemes or redeployment, while contractual workers have more limited legal protections. Communities near mine and plant sites risk losing PSU-funded social programmes covering healthcare, educational facilities, and capacity building.

CPI's assessment indicates that several policy and financing interventions are needed to offset adverse impacts, including investment in alternative industries, large-scale workforce reskilling, job creation, and targeted social spending. A comprehensive transition roadmap will need to estimate incremental investment requirements against declining revenue from conventional resources and identify suitable financing sources. Future CPI work will examine financing requirements and frameworks to direct capital to enable a just transition in Jharkhand and similarly affected coal-dependent states. The study reinforces the relevance of just transition frameworks for India's energy policy as national climate commitments advance.

Key figure — INR 725.9 billion per year — estimated economic impact of low-carbon transition on Jharkhand