Economy

Centre's green index to spur States to crack whip on industry

Anil Sasi Vishwanath Kulkarni New Delhi | Updated on February 23, 2011

Industrial units could find the going tough on the environment front, with States now set to wield a stronger baton on ‘green' norms in order to get more funds from the Centre.

The Government is readying an Environmental Performance Index, under which, performance in tackling environmental concerns would be among the criteria for the quantum of Central funds to be released to each State.

According to officials involved in the exercise, the approach envisages tabulating measures taken by each State towards enforcing adherence to environmental standards.

Specific measures, which could help States score on the index but increase compliance pressures on industrial units, include strengthening the monitoring system required while issuing environmental clearances for new projects and expansion schemes, focus on soil contamination and remediation of critically polluted areas, and a beefing up of the provisions of the Hazardous Substances Management Scheme.

Other parameters

Other key parameters include pollution abatement, natural resource conservation and the 3R's (Reuse, Recycle, Recover). Natural resource conservation focuses extensively on increasing forest cover, while States having a ban in place on plastics can score high on the proposed index.

“Industrial units, especially the ones that are on a weak leg with respect to environmental norms, could find the going tough, especially in States that take a proactive approach to get more Central fund,” a Government official involved in the exercise said. The Planning Commission is in the process of giving a final shape to the proposed ranking, following which, the format would be put up for necessary approvals.

The views of States would be sought once the final index is in place, which, according to indications, places hill States, including Uttarakhand and Himachal Pradesh, right at the top.

Funding

Currently, funding from the Centre to States happens through statutory and the non-statutory transfers. Statutory flows include grants from the Finance Commission, which are unconditional for the most part and include grants intended for onward transmission to local bodies.

Non-statutory flows entail central assistance for State plans by the Planning Commission, based on parameters such as fiscal performance, income levels, tax collection and certain nationally important targets, apart from transfers under the Central Plan and Centrally-sponsored schemes.

Published on February 22, 2011

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