Text and photograph by Divya Karnad
As a fast-developing country, India’s economic growth is allowing millions to escape poverty. A new government has risen on this mandate of overcoming economic debacles, and is doing so by leaning on the primary sector of the economy, such as mining, a sector that is distinctly low in priority for developed countries. While developed countries have switched to service and knowledge-based economies (tertiary and quarternary sectors), India’s development plan remains firmly on the path to boosting gross domestic product through unsustainable natural resource use. The World Bank predicts that this inability to switch into tertiary and quarternary sectors will push Indians back into poverty by triggering a new recession. It claims that the Indian economy could crash due to shortages of clean air, food and water.
The cost of environmental degradation in India was estimated to be $80 billion annually in 2009. In 2012, the cost of ignoring environmental degradation was pegged at 3% of GDP. Deteriorating health due to poor air, water and food quality now costs India’s economy about 5.7% of GDP. Several Indian economists at the World bank, along with former ministers such as Jairam Ramesh identify that this grow now, clean up later strategy is becoming prohibitively expensive. In other words, addressing environmental issues in the short term is actually a pro-development move.
In the World Bank’s 2014 survey of 178 countries, India ranked well below its new BRIC allies in terms of environmental quality. This survey was concluded well before the flurry of new environmental clearances to industry. How long can industries dependent on natural resources last if India’s natural resources are being consumed at this pace? Spanning several different governments, India’s development plan appears to repeat the mantra of encouraging natural resource hungry industry at the cost of the environment.
If this is the only foreseeable way to grow, then encouraging the primary and secondary sector requires planned natural resource use. Instead, there appears to be an irrational speed-up of development at present, despite the fact that India cannot afford to depend on globally-sourced resources. A strategy of keeping the current account deficit in check by only boosting natural resource-hungry industry merely delays the impending bubble burst. Current policy directives aimed at keeping the Sensex afloat indicate a rush of short term solutions.
With environmental problems looming on the horizon, enthusiasm by a minister for environment, forests and climate change to promote industry by diluting due process should serve as a red flag. Even if India’s GDP growth rate was to push beyond 5%, could her citizens continue to afford to live in the country? Several groups, including Delhi-based Centre for Science and Environment, have exposed the life-threatening effects of air pollution linked to thermal power, one of India’s most resource-hungry primary industries. Despite the fact that India’s dependence on coal for power is over 70%, there has been no attempt to address this issue in terms of the national budget or environmental clearances.
From an economic standpoint, the last thing India needs is another financial slowdown. A rational growth track calls for diversification of industry. Rather than merely imitating or importing developments from the west, there is a need to encourage indigenous innovation. This innovation need not come at the cost of existing rules and regulations, particularly when these rules were instituted to safeguard basic citizen’s rights to clean air, water and food. Improving well-being for Indians requires a balance of present and future concerns.
The first step towards this is to move beyond a singleminded vision of industrialization and progress. Safeguarding India’s economic future requires safeguarding the systems on which economics depends—its citizens, ecology and culture. Following environmental laws is one way to ensure that development is conducted with care.
This article was published in Live Mint on 14th October 2014 and can be accessed here.