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Business News/ Opinion / Rapid, inclusive and sustainable
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Rapid, inclusive and sustainable

Economic growth must have all three dimensions all at once

India has emerged as the world’s second largest emitter of sulphur dioxide, which has deleterious public health consequences. Photo: BloombergPremium
India has emerged as the world’s second largest emitter of sulphur dioxide, which has deleterious public health consequences. Photo: Bloomberg

New Delhi: There has been a persistent demand to make the environment business-friendly. But very few have talked about the need to make business environment-friendly. The two must go hand-in-hand.

This is the only way to make rapid economic growth inclusive and sustainable as well. It is somewhat ironic that Indian companies will accept tough environmental conditions for their projects in countries like Australia but get very agitated when similar conditions are imposed on their projects at home.

Most public hearings mandated under the law are a sham: where there are hearings, there is no public and where there is public, there are no hearings. The environmental impact assessments also mandated by law are done very casually and are seen as a mere formality to be complied with. This is why, barring a few exceptions, the environmental track record of Indian enterprise—both in the public and private sector—has been very poor. Laws have been flouted with impunity and the culprits—like those companies discharging untreated effluents into water bodies and rivers —have got away with it.

There is always a real historical context to legislation which is often overlooked by advocates of loosening laws. The Forest Conservation Act of 1980 came into being when there was widespread concern at the indiscriminate manner in which our valuable forests were being exploited. The landmark Chipko movement took place in the Himalayas in the mid-1970s and this, more than anything else, awoke the nation to rampant deforestation and its impact on local communities.

Incidentally, it was not a coincidence that the movement was led and sustained by women because ecological protection has a very strong gender dimension. The then-Prime Minister Indira Gandhi spared no effort to write regularly to chief ministers, most of whom belonged to her own political party. In one famous instance, she took time off from negotiations with Zulfikar Ali Bhutto, then prime minister of Pakistan, at Shimla in July 1972 to write to Kedar Pande, the chief minister of Bihar expressing her anguish at the reckless manner in which forests were being destroyed in the state.

The Environment (Protection) Act, 1986 was born in the backdrop of humanity’s worst industrial catastrophe, which occurred on 2-3 December 1984 at Bhopal. The Forest Rights Act of 2006 was born out of an acknowledgement that forest administration had contributed to the growth of Maoist propaganda and ideology in forest-rich areas by the insensitive manner with which it approached the livelihood concerns of tribal communities. The new land acquisition law of 2013 was enacted at a time when there was a strong consensus that huge injustices had been perpetrated on farmers, particularly through the forcible application of the colonial 1894 law which empowered governments but definitely not the people who are affected by land acquisition.

One of the structural features of environment-related legislation in India is that the laws have been passed by Parliament but their enforcement is the responsibility of states. States have not invested enough in improving the technical and managerial capacity of pollution control boards, for instance.

Some boards like in Gujarat and Tamil Nadu have brought about innovations (like third-party audit in Gujarat) but overall, their record has been disappointing. The Centre, too, has not treated the Central Pollution Control Board (CPCB) with the degree of seriousness it deserves and has not made the necessary investments to enable it to play its appropriate role. The complete revamp of the CPCB and its state-level counterparts is essential. A commitment made to the Supreme Court three years back to establish a professional and autonomous institution for environmental appraisal and monitoring also must be fulfilled.

At the same time, new regulatory instruments must be experimented with. Nothing would be better if we have regulations enforced without necessarily having an army of inspectors (and in the process indulging in what economists call rent-seeking but what in simple language would be called bribery and corruption).

The US dealt with the problem of acid rain caused by emissions of sulphur dioxide from power plants and other industries by a market-friendly mode of regulatory intervention called cap-and-trade. Emission levels were set and companies exceeding those levels had mandatorily to buy permits from those well within the levels. Four years ago, a team of economists from MIT and Harvard were asked to design such a system in India as well and Gujarat and Tamil Nadu were taken as the states to launch the pilots. Unfortunately, that initiative is sputtering. Market-friendly instruments are not a universal panacea, but they should certainly be tried out where they can have a positive impact.

For the most part, India has progressive standards and laws, but their enforcement has left much to be desired. But there are some areas where new norms will have to be set. India has already emerged as the world’s second largest emitter of sulphur dioxide, which has deleterious public health consequences. We lack concentration standards for sulphur dioxide emissions from power plants which are the important source. Similarly, mercury is toxic, but we lack concentration standards here as well.

Finally, civil society organizations have played a key role in awakening the country’s conscience to pressing environmental issues. The current ruling dispensation does not seem to be well-disposed towards them, to say the very least. This is indeed most unfortunate and calls for some sort of mass mobilization to begin with.

The author is a Rajya Sabha MP and former Union minister.

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Published: 10 Nov 2014, 01:11 AM IST
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