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India 'cannot pollute way to prosperity' says minister

by Staff Writers
New Delhi (AFP) Feb 14, 2011
India's crusading environment minister has rejected criticism that his pro-green policies are driving away foreign investors and said the country "cannot pollute its way to prosperity".

Jairam Ramesh, whose push to enforce environmental rules has put him in conflict with business, said there was "no robust empirical evidence" to suggest his blocking of industrial projects had contributed to a drop in foreign investment.

India, whose economy is expected to grow by 8.6 percent in the current fiscal year, must ensure that its growth "is ecologically sustainable," Ramesh told a gathering of foreign journalists late Monday.

"The time has come for India to make tough choices," said Ramesh, whose ministry was seen as little more than a rubber stamp for industrial projects before he took over the portfolio.

The country "cannot pollute its way to prosperity," Ramesh said.

"All I am doing is enforcing the laws of the land."

Ramesh has created waves in recent months by shelving plans by British giant resources Vedanta to mine bauxite on land held sacred by tribal people, ordering the demolition of a 31-storey luxury condominium in Mumbai, and stalling construction of a $3 billion luxury residential town in western India.

The minister, who is reported to have been prodded by ruling Congress party colleagues to be more conciliatory, last month approved plans by South Korea's Posco to build a $12 billion steel mill but attached over two dozen conditions.

Worries have been raised in financial circles that Ramesh's zealous enforcement of environmental rules is creating an uncertain regulatory climate that is deterring foreign investors.

In 2010, foreign direct investment (FDI) in India slid 32 percent from a year earlier to $24 billion, according to United Nations figures.

India's central bank recently voiced concern that "a major reason for the decline in inward FDI is reported to have been the environment sensitive" policies pursued by the government.

India badly needs investment to upgrade its shabby ports, highways and other transport as it seeks to end bottlenecks and propel economic growth to double-digit levels the government says are needed to reduce massive poverty.

Ramesh said he was attaching more conditions to some environmental approvals "but I have never said I am here to reject projects".

"I am not Dr. No," he said, referring to his media nickname.

The minister said many of the conditions that he attached to industrial projects were a "leap of faith" because the government lacked the administrative network to police their enforcement.

He said he had to trust that the "public gaze will put pressure on companies to become much more (ecologically) sensitive".

In the past, he said, there was a "certain laxity" in enforcing environmental rules -- not all of which could now be corrected.

"I would spend all my life reopening files. I have to look to the future," he said.

earlier related report
India, China growth race 'silly', says Nobel winner
New Delhi (AFP) Feb 14, 2011 - India's leading economist, Nobel Prize winner Amartya Sen, dismissed on Monday the "silly" obsession of comparing the economic growth rates of China and India.

In a lengthy critique of the practice, Sen argued that New Delhi was far behind in the growth race, but more importantly it lagged in other criteria that showed real living standards were far inferior in India.

"Despite the interest in this subject (of comparing India's eight-percent growth to China's 10 percent)... this is surely a silly focus," Sen wrote in The Hindu.

Growth as estimated by gross national product (GNP) was an arbitrary measurement, he said, and "the lives that people are able to lead -- what ultimately interests people most -- are only indirectly and partially influenced by the rates of overall economic growth".

In an unflattering portrait of his country, Sen drew on data from World Development Reports of the World Bank and Human Development Reports of the United Nations to show China far ahead on most criteria.

Life expectancy at birth in China was 73.5 years compared with 64.4 years in India; Infant mortality rate is 50 per thousand in India and just 17 in China, and the under-five mortality rate is 66 for Indians and 19 for the Chinese.

China's adult literacy rate is 94 percent, compared with India's 65 percent, and mean years of schooling in India is 4.4 years, compared with 7.5 years in China, he said.

"Almost half of our children are undernourished compared with a very tiny proportion in China," Sen added.

"Comparing ourselves with China in these really important matters would be a very good perspective, and they can both inspire us and give us illumination about what to do -- and what not to do," he said.

India's finance minister and prime minister routinely refer to their target of double-digit economic growth, which they say is required to make a dent in India's enormous poverty numbers.

India and China, which both have billion-plus populations, are often grouped together by analysts and pundits as Asia's emerging powerhouses despite their different levels of development and diplomatic influence.

Sen said that growth in GNP, a statistical measure of economic output by citizens of a country, was enriching many Indians, but the focus on the new affluent middle classes obscured the larger picture.

"Those gains are, of course, good, and there is nothing wrong in celebrating their better lives through economic growth... but the exaggerated concentration on their lives, which the media tend often to display, gives an incomplete picture of what is happening to Indians in general," he said.

Sen won the Nobel prize for economics in 1998.

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