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July 21, 2011

Indian Economy|Natural Resources

Growing Pains

By Nitin Desai


Jairam Ramesh’s departure from the environment ministry is being seen as a victory by some industrialists and commentators. Their hope presumably is that we will get back to the old system of a lax, opportunistic and often corrupt implementation of laws for protecting the environment and natural wealth of the country.  They may well be disappointed.  The new incumbent, Jayanti Natarajan, is a politically astute person who will not see any advantage in backtracking on her predecessor’s decisions.  Moreover Jairam has moved into an area that affects industry even more directly than forests and environment and that is land acquisition.  If he brings to this area the same vigour and honesty that he brought into environmental clearances than the adverse impact on those corporate groups that thrive on bending and bypassing the letter and spirit of the laws of the land may well be even greater,

The belief that the honest implementation of the established laws on forest rights, forest protection, environmental care and public health are an unnecessary nuisance at our present stage of development is not restricted to a few corrupt industrialists.  It is shared by well meaning civil servants and politicians.  Even the Planning Commission, that should be lobbying for all of the things that the market will tend to forget, clashed with the Jairam led MOEF. That is why it is worth stepping beyond personalities to ask whether there really is a conflict between growth and environmental protection and, if co, how this is best resolved.

Forgive a little autobiographical digression here.  I came to policy making from the left of the political spectrum-the part that believed that nothing matters more than accelerating growth.  The more radical ones of our tribe relished the idea of forced savings and industrialisation at a hectic pace.  What weaned me from this Stalinist vision was my involvement in the almost neo classical methodology of cost-benefit analysis which, along with the usual market oriented stuff about international prices, also talked about externalities.  And this came in the time of Indira Gandhi for whom conservation trumped almost everything else.

The purpose of this digression is to suggest that actually conservation and environmental protection fits in better with neoclassical economics and conservative politics.  But the pursuit of quick profits by unscrupulous industrialists has distorted this equation and today the prime movers of environmental concerns are the civil society activists who have connected these concerns with their core agenda of social justice. That is why the disputes that have raged recently both for environmental clearance as well as for land acquisition have been presented as a clash between those who give priority to rapid growth and those who would settle for lower growth to protect the environment. 

Rapid growth has become an obsession of decision makers judging by the frequency with which the Deputy Chairman of the Planning Commission and the Finance Minister and other such worthies talk about it.  But please remember that the welfare of the Indians for whom this growth is being targeted also depends on the quality and integrity of their living environment. A new committee under Partho Dasgupta hopes to provide a better metric for measuring progress. But the growth obsession is not just a numbers illusion. It is a product of where power and influence rests today.

Rapid growth means more mega-projects for infrastructure, mining and manufacturing and a rapid expansion of urban areas. All large projects involving the exploitation and use of natural resources and urban expansion have environmental consequences that may involve one or more of the following:

  • Large scale land use changes often in ecologically sensitive areas,
  • Displacement of  large numbers of people from their homes and livelihood sources,
  • Extensive interventions in natural hydrological regimes,
  • Disruption of local biotic regimes,
  • Loss of forest cover; specially in  mining projects since a very large proportion of the unexploited mineral wealth of India, including coal, lie in forest land
  • A substantial increase in the air and water pollution load which may be of local, regional, national or even global concern.

The environmental consequences of rapid urbanisation will become  a growing concern. Vehicle ownership is expected to go up by a factor of seven. But, with higher vehicle efficiency standards, more public transport in cities and a shift of freight traffic to rail and coastal shipping, growth in energy consumption for transport and the consequential environmental impact may go up by about five times. The requirements of the growing urban population for living and working space, water and waste disposal will have environmental consequences that will have to be managed.  Rural-urban conflicts for scarce water and land fill sites for solid waste disposal will arise.

The clash between growth imperatives and the environment will become sharper and a decision-making framework that anticipates this and puts in place a mechanism that reconciles growth, land acquisition and environmental protection is good for growth, for social justice and for the environment.  The key lies in five elements:

  • full provision of data and information on project design and impact,
  • stakeholder engagement from an early stage, where necessary in public hearings,
  • negotiated solutions where people’s rights are affected,
  • generous compensation, relief and rehabilitation assistance and
  • careful monitoring by an independent watchdog.

A spate of legislation and policy initiatives is in the works, including a new Land Acquisition Act which may or may not incorporate provisions on relief and rehabilitation, the Chawla Committee proposals on natural resource leases and land sales, Jairam’s earliy proposal for an independent Environmental Protection Agency for handling clearances to name but a few. An important dimension that needs to be factored in is the role of the State Governments.  Many of the problems that we had recently have involved some sort of murky collusion between investors in a hurry and pliable State administrations.

The biggest change we need is in the mind set at the top in the Central and State Government and in corporate boardrooms.  Protecting the interests of landowners and other right holders, conserving resources, containing pollution loads to manageable levels and ensuring safety are not luxuries that we can postpone while we pursue growth mindlessly.  Ignore this message and every major project that is needed for the 9-10% growth that Yojana Bhavan pines for will be caught in a morass of protests and court cases. 

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