Environmental Protection Vs Economic Development

Of late, the Environment Ministry of India has been rejecting several large projects of national importance.

There is a raging debate around the country on the new proactive approach taken by the government. Some people, especially the activist NGOs, laud the new direction and active pursuit of environmental offenders, such as those manufacturing houses which have flouted forest conservation norms prescribed in the rules. Many people, though, question the adhocism practiced in the decision-making processes of the government.

Is India ready for the first-world practices on environmental conservation ? First, there is no real basis – India is probably the only country in the world which has actually increased the forest cover in the country by implementation of regulations for the past four decades. Notwithstanding the fact that forest poachers have proliferated, killing tigers and hawking elephant tusks and what not. Secondly, the most pressing need of the hour is not the environment as such – it is finding jobs for the teeming millions of Indians who are entering the workforce every year – not less than 10M freshers per year for the next many years !

First world countries can easily talk about their environment and try to impose their ideals on us – for them it is beneficial for India to depend on them for economic development however. If one really probes, it is easy to identify cases wherein first-world countries seem to only talk but fall head over heels when it comes to grabbing business – witness the unabashed salesmanship of President Obama when he visited India earlier this month, pushing for all kinds of large deals which would create nearly 60,000 American jobs back home.

So, it is absolutely clear that for ALL, business and economics come first in the pecking order.

Economic development is critical for India. Not just for its infrastructural development, but for its people development. India needs to reach USD 5,000 per capita in the next 10 years, becoming a USD 6T economy from its current USD 1.4T size. This is not going to be possible, if India tries to do everything in a perfect manner. Bread and economics come first, environment should come second, not the other way around. It is not that the entire world is queuing up to invest in the Indian manufacturing sector – what we are seeing is only “hot” money in the stock market, not really the FDI (Foreign Direct Investment) – we are still getting peanuts (less than USD 10B in the first half of the current fiscal) when compared to China or even Indonesia.

So, what are we talking here – we should try to encourage every industrialist who wishes to invest in India, not push him out of the country, because he is going to tell ten others how he has been treated in India. Problems will persist, but a time-bound resolution is a must. All government officials should be compensated on delivering results for India and Indian people. It is as simple as saying “go and find jobs for 10M Indians every year”, rather than worrying about whether a Walmart will swallow the mom-and-pop shops : such shops will never be able to provide large employment and generate demand.

So, the conclusion here is straightforward : when forests have long been de-notified, follow the rules in place and try to work out a mechanism by which the rules are implemented with (a) compassion for the affected people who can potentially be employed ; and, (b) a methodology by which the destruction of the forest is suitably compensated not by money as taxes but by creation of equivalent forest cover elsewhere in the same state for which the funding will be provided directly to the forest department of the state concerned by the manufacturing entity, instead of creating a pool of centrally-administered fund which never gets properly deployed in the affected state. The economic development of the affected states and the number of direct jobs created in the state should be enough justification for going ahead, and a national approvals authority should provide one-stop approval for such large projects. The motto is to avoid confusion and flip-flops in the decision-making, have transparency and clear rules, and let all people benefit in the process.


Vijay Srinivasan
20th November 2010


3 thoughts on “Environmental Protection Vs Economic Development

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