This article is the first in a series of articles about environmental management in India. In this installment, authors Sanjay Sampath and Raakhee Kulkarni provide an overview of the social and environmental challenges facing India now and in the next 20 years. Subsequent articles will focus on India’s environmental laws and regulations.

Overview

India is the seventh largest country in the world by geographical area. It has a population of over 1.1 billion people, up to 65% of which are under the age of 30. Over the next five to ten years, India is expected to experience aggressive growth in its Gross Domestic Product (GDP) — 8 to 10% by some estimates. While this growth seems high compared to many countries, India will require a high growth rate to ensure the livelihood of its population.

The huge population burden also brings with it a whole spectrum of social issues that have environmental implications. A review of the following statistics from the McKinsey Global Institute published in 2010 illuminates some of India’s challenges and opportunities in the next 20 years.

Table 1 – Urbanization of India

Challenges of India’s Economic Growth

While the recent growth in India’s economy was spurred by the superhot software sector, infrastructure and manufacturing seem to be the key growth areas now. India is also seeing huge amounts of foreign investment in the chemical, manufacturing and real estate sectors. Increased foreign investment has affected the environmental agenda in India. Many multinational companies that are setting up shop in India are creating a sort of precedent by taking environmental issues seriously, probably from the lessons learned in the West, where environmental issues that were initially ignored later required significant cost and time commitments to resolve.

The debate over growth versus environment that was observed in the middle and latter half of the 20^th century in the United States seems to be cropping up more frequently in India. There is an uptick in the activism of Non Governmental Organizations (NGOs). In some cases, NGOs have taken up major causes on behalf of poorer stakeholders, putting some large infrastructure and manufacturing projects on hold. Furthermore, environmental regulations are being enforced more stringently than earlier, and an overall “environmental awareness” has begun. These factors combined with increasing globalization have caused managers of Indian companies to take both environmental requirements and best practices seriously.

Trends in Environmental Management

The authors have noted several trends in environmental management in India.

1. Impact Assessment and Planning (IAP)

Assessing environmental and social impacts prior to setting up operations and obtaining environmental approval from the authorities is almost mandatory in most project categories. IAP assessments may be required not only for newly constructed facilities, but also for new operations that will be housed in an existing building.

2. Environmental Liability and Clean-up

Foreign investment has resulted in heightened scrutiny of current and historic environmental liabilities associated with property transactions in India. For a comprehensive discussion of environmental liability in India, please see the EHS Journal article, India: Environmental Liability and Contamination Regulations.

3. Sustainability and Regulatory Compliance

The increasing desire of Indian companies to meet world class standards has caused established companies in India to take on sustainability initiatives as a means of improving their global brand and reputation. In addition, the presence of a highly popular and visible Environmental Minister, Mr. Jairam Ramesh, has ensured that environmental compliance is given greater importance now than it has received been in the past. Mr. Ramesh also advocates principles such as “green accounting,” which furthers the drive to sustainability.

4. Climate Change

While India still lags the West in coming up with concrete regulations based on the development versus environment debate, there is an increasing awareness in India that climate change is not about scoring points but about the existence of entire communities inside and outside of India. In fact, reports from the Centre for Science and Environment (CSE) and the Ministry of Environment and Forests (MOEF) predict that India will be one of the countries that is worst affected by the global shift in weather patterns. India has carried out many Clean Development Mechanism projects under the Kyoto protocol, but it is unclear what kind of a framework will exist after 2012.

Summary

While progress on the environmental front is being made, India still faces some major challenges. Despite highly evolved environmental laws and regulations in some areas, many environmental practices such as regulation of air pollutants using a model seen in western countries are still at a very rudimentary stage in India. Increased environmental regulations will likely become a key area of concern in the near future as an increasingly wealthy citizenry demands more advanced environmental controls and a reduction in exposure to industrial pollutants.

Increasing urbanization will further strain the country’s urban infrastructure. Per the McKinsey Global Institute, the infrastructure equivalent of a “new Chicago” or two “new Mumbais” will have to be built every year in India for the next 20 years to meet the country’s demands. Another way of looking at the need for expanded infrastructure — India will need to add 20-times the capacity of paved roads, metros and subways that were added in the past decade to meet the anticipated urban population rise by 2030.

The environmental sector is expected to be at the forefront of India’s evolving story in the coming years.

Further Information

Future articles in this series will explain the evolution and breadth of environmental laws and regulations in India.

Read the EHS Journal article, India: Environmental Liability and Contamination Regulations, by Ravi Costa, Sanjay Sampath, Masood Mallick and Samrat Basak.

About the Authors

Sanjay Sampath is a principal consultant in the Mumbai, India, office of Environmental Resources Management (ERM). He was previously in Houston, Texas, U.S.A. for nine years, most recently in the role of a senior project manager in the field of air quality compliance with Sage Environmental Consulting, where he also served as the head of Indian operations. He was also previously with RMT, Inc. in their Houston office.

Raakhee Kulkarni is a senior consultant in ERM’s Mumbai office, where she is the head of ERM’s Transaction Services (TS) group. She has developed significant experience in environmental liability assessments, environmental due diligence, compliance audits, environmental impact assessment, policy and regulatory framework, institutional strengthening and capacity building and studies on solid waste management and low cost sanitation.

Photograph: Indian Flag Pattern on Wall by Asif Akbar, Mumbai, India.

References

1. McKinsey Global Institute: India’s Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth
2. “The Two Cultures Revisited: The Environment-Development Debate in India”, Economic and Political Weekly – Vol. No 42 dated Oct 16^th
3. www.erm.com

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