In the present economic scenario, India, including each of its states, needs to adopt
appropriate policies that would achieve rapid economic growth while simultaneously
reducing its greenhouse gas emissions for a low carbon future. As manufacturing is a
crucial component of the engine that spurs economic growth, and as it is a major consumer
of energy, this paper aims to identify the core factors that have influenced energy
consumption by the manufacturing industries of the eastern states (Bihar, Chhattisgarh,
Jharkhand, Odisha and West Bengal) of India, in the period 2008-09 to 2012-13 and also
wishes to make an interstate comparison of energy consumption. We conduct an index
decomposition analysis, more specifically the log mean divisia index, to identify key
factors behind the increase in energy consumption. The findings of the paper suggest that
besides energy intensity, level of activity is a major contributing factor. The findings also
suggest that there remains a lot of scope for improving energy related policies with
regard to the manufacturing industries of eastern India