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Subject ECONOMICS

Paper No and Title 15: Environmental Economics

Module No and Title 27: Mechanism for Environment Regulation in India

Module Tag ECO_P15_M27

ECONOMICS Paper 15: Environmental Economics

Module 27: Mechanism for Environment Regulation in India
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TABLE OF CONTENTS

1. Learning Outcomes
2. Introduction
3. Existing framework of Environment Protection
4. Regulatory Mechanism
5. Various Schemes and Programmes
6. Summary

ECONOMICS Paper 15: Environmental Economics

Module 27: Mechanism for Environment Regulation in India
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1. Learning Outcomes
After studying this module, you shall be able to

 Know about the existing Indian framework to protect its environment

 Understand the regulatory mechanism
 Comprehend various schemes introduced towards the aim of environment
protection
 Know about the recent steps undertaken by the Indian Govt. in this field

2. Introduction

The present module aims to abreast the readers with the information related to the various
bodies and schemes initiated in the direction of environment protection. The Indian
Constitution clearly holds the state responsible to preserve and ameliorate the
environment and to conserve the wildlife and forests of the country. It imposes an onus
on every Indian citizen to preserve and ameliorate the natural environment including
forests, lakes, rivers, and wildlife. Environment has also been referred to in the Directive
Principles of State Policy and in the Fundamental Rights. The Department of
Environment was constituted in India in 1980 to certify a healthy environment for the
country. This afterwards became the Ministry of Environment and Forests in 1985.

The Ministry of Environment and Forests is especially concerned with the application of
policies and programs related to preservation of the country’s natural resources including
rivers and lakes, its forests, bio-diversity and wildlife certifying the welfare of animals
and control and prevention of pollution. The major goals of the Ministry of Environment
and forests are:

Conservation of flora, fauna, forests and wildlife,

Prevention and abatement of pollution,
Afforestation and regeneration of degraded fields,
Certifying the welfare of animals, and
Protecting the environment.

These objectives are backed by a handful of legislative and regulatory measures, to

preserve, conserve and protect the environment. Besides the legislative measures, a
National Conservation Strategy and Policy Statement on Environment and
Development, 1992, National Forest Policy, 1988, a Policy Statement on Abatement of
Pollution, 1992 and a National Environment Policy, 2006 has also been derived.

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Module 27: Mechanism for Environment Regulation in India
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 The Environment Protection Act (EPA), 1986 originated soon after the Bhopal
Gas Tragedy. Environment Protection Act is considered to be a composite
legislation as it fills many gaps in the existent laws. After some time, many laws
came into enforcement as the problem began escalating, for example, The
Chemical Accidents (Emergency Planning, Preparedness and Response) Rules,
1996.

The Environment Protection Act was enacted with a goal to protect and improve the
environment. It authorizes the Central Government to constitute authorities under section
3(3) charged with the mandate of impeding environmental pollution in its every form and
to tackle environmental issues that are specific to various sections of the country. This
Act was later amended in 1991.

3. Existing Framework of Environment Protection

The below mentioned framework exists for environmental preservation, protection and
sustainable development, which is clearly mentioned in the rules, regulations and
programmes of the MoEF.

1. The National Environment Policy: The MoEF has affirmed a comprehensive

National Environmental Policy (NEP) 2006, based on overarching guiding
principles that include, among others, right to development, environmental
protection as an intrinsic part of the development process, environmental
standards setting, the precautionary principle and polluter pay principle,
preventive action, economic efficiency, and equity. For prevention of pollution in
general and air quality management in particular, various actions have been
suggested which inter-alia include an integrated approach to strengthening of
regulation and enforcement of emissions standards for both point and non-point
sources, preparation of action strategies for cities to address air pollution,
promotion of R&D, formulation of national strategy for urban transport and
energy conservation. The National Environment Policy, 2006 (NEP) exhibits the
following key principles: -

I. Human Inhabitants are at the Centre of Sustainable Development Concerns:

Human Inhabitants are at the center of the issues for sustainable development.
Human Beings should get a productive and healthy life in harmony with nature.
II. The Right to Development: The right to development ought to be fulfilled, so
that the developmental and environmental needs of the existing and coming
generations.be met.

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III. Environmental Protection is an Inherent part of the Development Process:

For sustainable development, environmental protection must be an inherent part
of the development process. It cannot be considered separately from it.
IV. The Precautionary Approach: Where there is credible threat of fatal or
irreversible damage to key environmental resources, lack of full scientific
certainty ought not to be used as a rationale for postponing cost-effective
measures to avert environmental degradation.
V. Economic Efficiency: Economic efficiency will be sought to be achieved in
various public actions for environmental preservation.. This Principle requires
that the services of environmental resources be given economic value, and such
value to be counted equally with the economic values of other goods and services,
in the analysis of alternative streams of action.

2. Other Policies
The “Policy Statement for Abatement of Pollution, 1992” and “National Conservation
Strategy and the Policy Statement on Environment & Development, 1992” accentuates
pollution abatement and encouragement of cleaner technologies to reduce industrial
pollutants. The National Water Policy, 2002 comprehends provisions for developing,
preserving, sustainable utilization and management of significant water resources and the
requirement to be managed by national perspectives.
The major reasons of land degradation are engendered by implicit and explicit subsidies
for water, fertilizer, power and pesticides. Grazing lands are usually common property
resources, and due to the non-ample empowerment of local institutions for their
management, biomass base gets overexploited. The absence of effective policies and
persistence of certain regulatory practices leads to reduction in people’s incentives for
afforestation, and leads to reduced levels of green cover.

4. Regulatory Mechanism

The present legislative framework is mainly contained in the composite Environment

Protection Act, 1986; the Water (Prevention and Control of Pollution) Act, 1974; the
Water Cess Act, 1977; and the Air (Prevention and Control of Pollution) Act, 1981. The
law related to the regulation of forests and bio-diversity is contained in the Indian Forest
Act, 1927; the Forest (Conservation) Act, 1980; the Wild Life (Protection) Act, 1972
and the Bio-diversity Act, 2002.
The Environment Protection Act empowers the Government to determine national
standards for ambient environmental quality and regulating discharges to monitor
industrial locations, to state procedure for hazardous substance management and to
collect and dissipate information related to environmental pollution.

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The Water (Prevention and Control of Pollution) Act, 1974 deals exhaustively with water
issues. It entrusts the Government to constitute Pollution Control Boards to cultivate the
beneficence of national water bodies. It gives a “Consent” strategy to control and prevent
water pollution and entrusts State Boards to regulate compliance. Water Cess Act, 1977
was affirmed to give more strength to the Pollution Control Boards financially, to
encourage water conservation. The Act entitles the Central Government to levy a cess on
the water abstracted from natural resources by the industries and local authorities.
The under-mentioned rules under the Environment (Protection) Act, 1986 further
complement the provisions under the Act: -

 The Environment (Protection) Rules, 1986

 The Manufacture, Storage and import of Hazardous Chemical Rules, 1989
amended 2000
 The Manufacture, Use, Import, Export and Storage of Hazardous micro-
organisms Genetically engineered organisms or cells Rules, 1989
 The Hazardous Wastes (Management & Handling) Rules, 1989 amended 2000,
2003
 The Chemical Accidents (Emergency Planning, Preparedness and Response)
Rules, 1996
 The Bio – Medical Waste (Management and Handling) Rules, 1998 as
amended 2000 and 2003.
 The Ozone Depleting Substances (Regulation) Control Rules, 2000

The review of the current regulatory framework throws some light on some deficiencies
that might engender in-effective environmental planning and regulation. Cross cutting
nature of many issues, inter-ministerial jurisdiction and absence of unified authority to
accord with environmental management for all pollution sources hampers integrated
planning and execution of standards.

5. Various Schemes and Programmes

There are various centrally sponsored schemes undertaken for Pollution Abatement. The
main aim of these schemes is to certify pollution prevention by using various measures
like assessment and regulation of air and water quality, commencement of cleaner
technologies for resource preservation, establishing Common Effluent Treatment Plant
(CETPs) in cluster of small scale units, research and development, up-gradation of
laboratories etc. The major scheme under this head is the constitution of Central Pollution
control Board (CPCB).

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Below are mentioned, some of the significant actions inaugurated under various schemes
on pollution abatement:
1. Central Pollution Control Board

Central Pollution Control Board (CPCB) of India is a statutory organization under the
Ministry of Environment and Forests (MoEF). It was established in the year 1974 under
the Water (Prevention and Control of Pollution) Act, 1974. CPCB is also enjoys powers
under the Air (Prevention and control of Pollution) Act, 1981. CPCB technically assists
the MoEF related to the provisions of the Environment (Protection) Act, 1986. CPCB is
also entrusted with the function of coordinating the actions of the State Boards by
providing technical assistance and resolving conflicts among them. It works as a
technical wing of MoEF. The Central Government nominates the chairman who leads the
board. Currently, the board is led by Shri Arun Kumar Mehta IAS.
The head office of CPCB is in New Delhi. It has seven zonal offices and 5 laboratories.
The board carries out environmental assessment and research. It regulates the air and
water quality and keeps respective quality information. It gives advice to the central
government on the matters of preventing and controlling air and water pollution. It
informs the Governments of Union Territories regarding any pollution source
causing water and air pollution. CPCB together with State Pollution Control Boards
(SPCBs) is accountable for execution of legislations concerning abatement and control of
environmental pollution.
The board consists of approx. 500 full-time employees including engineers, scientists and
environmental protection specialists.
Functions of CPCB
Functions of CPCB come under both national level and as State Boards for the Union
Territories. CPCB, under the Water (Prevention and Control of Pollution) Act, 1974, and
the Air (Prevention and Control of Pollution) Act, 1981, aims to encourage cleanliness of
wells and streams in various portions of the States by controlling and preventing water
pollution, and to ameliorate the quality of air and to control or prevent air pollution in the
country.
 Air quality: CPCB runs nationwide programs of better air quality monitoring
known as National Air Quality Monitoring Program (NAMP). The network is
composed of 342 operating stations which cover 127 cities in 26 states and 4
Union Territories of the country. Under N.A.M.P., 4 air pollutants viz., Sulphur
Dioxide (SO2), Oxides of Nitrogen as NO2, Suspended Particulate Matter (SPM)
and Respirable Suspended Particulate Matter (RSPM/ PM10) have been identified
for regular monitoring at all the locations. Regulating meteorological parameters
like wind direction and wind speed, relative humidity (RH) and temperature were
also amalgamated with the monitoring of air quality. This information on Air
Quality is updated weekly at ITO.

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 Water quality: Fresh water is an essential and finite resource for use in industry,
agriculture, propagation of wildlife & fisheries besides for human existence. India
is a riverine country. In India, there are 14 major rivers, 44 medium-sized rivers
and 55 minor rivers besides numerous, ponds, lakes and wells which are the main
source of drinking water. Rivers are highly dependent on the monsoon rain which
caters to only three months-a-year. Due to this, most rivers run dry throughout the
remaining period of the year often carrying wastewater discharges from various
types of industries or cities or towns. This endangers the quality of our scarce
water resources. CPCB constituted a nationwide network of water quality
monitoring in collaboration with concerned SPCBs/PCCs, which has been
running 1019 stations in 27 States and 6 Union Territories. The inland water
quality supervision network operates under a three-tier programme i.e Global
Environment Monitoring System (GEMS), Monitoring of Indian National Aquatic
Resources System (MINARS) and Yamuna Action Plan (YAP).

 Urban area programs (EcoCity Program): CPCB programs designed for urban
areas, also known as EcoCity Program fall under the Tenth Plan to ameliorate
environment through execution of identified environmental improvement actions
in specific towns and cities. Pilot studies carried out for urban areas by the Centre
for Spatial Environmental Planning created at the CPCB under the World Bank
Funded Environmental Management Capacity Building Project and supported by
the GTZ-CPCB Project under the Indo-German Bilateral Program. According to
these studies CPCB fosters an exhaustive urban improvement system by
exercising practical, innovative and non-traditional solutions. Under the Tenth
Plan, Rs.15 crore has been budgeted for the period 2002-03 to 2006-07 for
Ecocity projects.

 Municipal Solid Waste Rules: Every municipal authority comes under

the Municipal Solid Wastes (Management & Handling) Rules, 2000 (MSW rules,
2000) and is accountable for collecting, segregating, storing, transporting,
processing and disposal of municipal solid. CPCB collects necessary information
from municipal authorities and provides them with technical assistance.

 Noise Pollution: According to S.O. 123(E) by MoEF, various sources like

construction activity, industrial activity, generator sets, music systems, loud
speakers, vehicular horns and other mechanical devices majorly affects the human
health. CPCB has the responsibility to monitor and control noise emitting sources
with the aim of regulating the ambient air quality standards.
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 Environmental Data Statistics: CPCB regulates environmental data statistics in

which air quality data and water quality data come through. In the case of air
quality data, it monitors the level of SO2, NO2, RSPM and SPM. CPCB measures
and maintains water quality data too.

2. Industrial Pollution Abatement through Preventive Strategies

The above scheme is composed of three components; Environmental Audit, Adoption of

Clean Technology in Small Scale Industries and Environmental Statistics. The scheme
aims at assisting small scale industries in adoption of cleaner production practices and
reducing waste generation. Under the above programme, learning has been started in the
area of preparing environmental audit statements in various sectors.

3. Establishment of Environment Protection Authorities and

Environment Commission and Tribunal
Authorities have been constituted as per the various orders of the Supreme Court for
environmental compliance and enforcement of various activities under this programme.
Three Authorities have been formed;

i. National Environmental Appellate Authority (NEAA) under National

Environment Appellate Authority Act, 1977 to entertain appeals with respect
to industries, operations or processes;
ii. Loss of Ecology (Prevention and Payment of Compensation) Authority
for the State of Tamil Nadu to tackle with pollution emitted by the tanneries
and other pollution-emitting industries in Tamil Nadu.
iii. Environment Pollution (Prevention and Control) Authority (EPCA) for
the National Capital Region for compliance relating to environmental
standards, emission or discharge of pollutants, steps to control vehicular
pollution, restriction of industries etc.

4. Assistance for Abatement of Pollution and Environment Policy & Law

This scheme strengthens various State Pollution Control Boards (SPCBs) and the State
Environment Departments to execute the statutory provisions for initiating pollution
abatement measures, up-gradation of facilities for analysis, capacity building etc. Under
the scheme, most of the State Boards were given funds to help them strengthen the
laboratories and taking up various research projects too.

5. Clean Technology
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The goal of the scheme is to support the initiation of cleaner technologies and cleaner
production through establishing demonstration projects and initiation of relevant R&D
activities. Some of the programmes undertaken include Life Cycle Assessment (LCA)
Studies in certain sectors like Pulp & Paper, Coal Based Thermal Power Plants, carrying
Capacity Studies in River basins. Bio remediation of Railadevi Lake, Maharashtra and
recycling of marble slurry waste in Rajsthan are some of the studies sponsored for clean
technology.

6. Creation of Management Structure for Management Substances

Under the scheme, the activities are conducted under three thrust areas namely; chemical
safety, chemical accident prevention and sound management of hazardous waste and
municipal solid wastes. The activities initiated accordingly, include preparation of off-site
emergency plans, establishment of emergency response center, establishment of Common
Treatment, Storage and Disposal Facilities (TSDF) for industrial hazardous wastes,
Preparation of hazardous analysis report etc.

7. Environmental Impact Assessment

Environmental Impact Assessment (EIA) is one of the important management tools for
incorporating environmental concerns in the development projects at the planning stage.
Environmental clearance has been made imperative since January, 1994 and Ministry had
undertaken re-engineering of environmental clearance process. A new notification on
environmental impact assessment thereafter has been issued in September, 2006 which
replaces the earlier notification of 1994. Under the new notification, the developmental
activities have been categorized into Category ‘A’ and Category ‘B’ on the basis of
potential impacts rather than on the basis of investment criteria. During the last two years,
large number of projects has been given environmental clearance.

8. Common Effluent Treatment Plant (CETP)

The goal of this scheme is to provide financial assistance to the small scale industries in
clusters to establish/upgrade Common Effluent Treatment Plants (CETPs) for enabling
them to abide by the environmental discharge standards. The funding pattern for CETP is
as follows:
 State subsidy : 25% of the total project cost
 Central subsidy : 25% of the total project cost
 Entrepreneurs contribution : 20% of the project cost
 Loan from financial institutions : 30% of the project cost

The programme is spread all over the country and the funds from the Centre are routed
through respective State Pollution Control Boards.

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9. Taj Protection Mission

In compliance with the orders of Supreme Court of September, 1996, the Planning
Commission estimated an amount of Rs.600 crores on a 50-50% (Centre-State) matching
basis to execute various schemes related to the protection of Taj Mahal. In the first phase,
10 schemes were identified relating to uninterrupted power supply around Agra,
augmentation of water supply, improvement of drainage, management of solid waste etc.
with an estimated cost of Rs. 222.21 crores. The Centre has released its share of Rs. 111
crores. A post project evaluation study for the projects executed under the scheme has
been sponsored to NEERI, Nagpur.

6. Summary
India has introduced many reforms from time to time in the direction of environmental
protection. Many bodies have been constituted to help India in framing policies on how
to conserve its natural resources and ameliorate the living conditions across various
cities/states.

India’s Supreme Court has recently ordered the government to open a new institution
based on the USA’s Environmental Protection Agency, aimed at addressing rising levels
of pollution across different parts of the country. The National Environmental Appraisal
and Monitoring Authority (NEAMA) will decide where power stations, dams, mining
operations and industrial units can be built.

The new autonomous body could play an important role in protecting India’s fast-
disappearing forests, reduce the spread of coal-fired power plants and force businesses to
engage better with local communities. It was first proposed in 2011 but the plans were
not executed due to the MoEF’s reluctance to lose its powers. But, the NEAMA will now
be made operational soon.

ECONOMICS Paper 15: Environmental Economics

Module 27: Mechanism for Environment Regulation in India