YOJANA June 2013 1

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June 2013 Vol 57

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C O N T E N T S

INTEGRATING SUSTAINABILITY INTO INDIAN PLANNING Ashish Kothari ..................................................................................5

CLIMATE RISK: CRITICAL CHALLENGES Anil Kumar Gupta ...........................................................................11

CHANGING DYNAMICS OF CENTRE-STATE FINANCIAL RELATIONS Pravakar Sahoo, Amrita Sarkar .......................................................18

DO YOU KNOW? ........................................................................24

CONSTRUCTING CHANGE BY ADVANCING ENERGY EFFICIENCY Radhika Khosla ...............................................................................26

INDIAS URBAN ENVIRONMENTAL CHALLENGES: LAND USE, SOLID WASTE AND SANITATION Kala Seetharam Sridhar, Surender Kumar ......................................30

WESTERN GHATS AND WILD LIFE PRESERVATION P K Sujathan ....................................................................................36

PROBLEMS IN FLOOD-PRONE RIVER BASINS Dinesh Kumar Mishra .....................................................................41

BEST PRACTICES PIPES OF PROSPERITY Ranjan K Panda ...............................................................................46URBAN BIODIVERSITY : GROWTH AND DEVELOPMENT OF NCT DELHI Meenakshi Dhote ............................................................................49

NORTH EAST DIARY PANIDIHINGA PARADISE OF BIRDS Mouchumi Gogoi ............................................................................55

PROTECT INDIGENOUS BIODIVERSITY AND KNOWLEDGE Vandana Shiva ................................................................................60

YOJANA June 2013 3YOJANA June 2013 3

You are, Therefore I am

It may be a little surprising to know that the irst civilisation in the world to collapse due to ecological factors was Sumer in Mesopotamia more than 4000 years ago. You may perhaps be thinking that it was some natural disaster that led to the extinguishing of the Sumerian civilisation. But the reality is different. In fact it was ,in a great measure, a man made catastrophe caused by the increasing salinity in the extensive irrigation channels built by the Sumers for cultivation. Indeed historical and archaeological evidence points out that ecological factors played a crucial role in the collapse of a number of ancient civilisations like the Indus Valley, Greek, Phoenician, Roman and the Mayan. Today again, a similar possibility is staring us in the face threatening to begin the Endgame.

Apparently, the mankind has come a full-circle over this period so far as its relationship with nature and the surroundings is concerned. It has been argued that the chief causes of the environmental destruction do not lie in individual choices like higher consumption. These are rooted in the social and historical realities arising out of the speciicities of the modern industrial world and the gamut of economic relations arising out of it between individuals and the nations at large. Whatever view you may hold about the causes of the environmental crisis we face today, there is no doubt that in the modern quest for conquering the earth we are clearly in the danger of overstepping the critical thresh holds whether it is the fossil fuel consumption, exploitation of rivers and under-ground water, Green House Gases emission and similar other indicators.

Environment is an issue that does not really obey the boundaries we have erected on the map. The interconnectedness of the human existence on the earth is most clearly relected when we discuss questions of environment and ecology. The long debate about environment and development is not yet settled even while the nations struggle to ind a model of sustainable development without destroying the ecology. Despite the universal nature of environmental issues, when it comes to equitable burden sharing of the carbon footprint left by the countries, the debate between per capita emission approach and the total emission approach continues to be deeply contentious. It becomes an important fact in international climate change negotiations when we ind that the developed western countries contribute more than 50 percent to the total carbon emission in the world. It is dificult to convince a developing nation not to invest in setting up factories and industries to improve the living standards of its citizens in the name of environmental concerns alone.

The range of issues concerning environment and ecology is truly complex and bewildering. From the existing economic structures to our consumption choices, tribal rights over natural resources to imperatives of economic development, common environmental resources of the mankind vs national priorities all have trade-offs and require choices to be made for which there exists no consensus. The policy responses to these issues are often dificult to make and involve a long and arduous process of consultation with the stake holders at multiple levels. The multitude of movements, many of which are political and some times violent also, centred around the issues of environment relect on the one hand the lack of consensus on these issue and on the other, the vibrancy and resilience of India as a democratic nation.

While we ponder over the issue of environment and sustainable ecology, we realise that the scale of transformation of nature by man has been unprecedented, its rate of change staggering. The great thinker and proponent of Intermediate Technology E.F. Schumacher asserted that the problem of environmental deterioration is not just technical but it stems from the life cycle of the modern world, its most basic beliefs-its metaphysics. We must realise the essential unity of the universe and the interconnectedness of the existence of all life forms, indeed all of nature. It is the time we adopted the Zulu philosophy of Ubuntu which translates into You are, therefore I am. q

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NDIAS ATTEMPTS a t i n t e g r a t i n g e n v i r o n m e n t a l sus t a inab i l i ty in to economic planning have so far been piecemeal

and hesitant. They have done little to stem the rapid slide into ecological devastation and consequent livelihood, cultural, and economic disruption. At the root of this lies the stubborn adherence to a model of economic growth that is fundamentally unsustainable and inequitable, even more so in its globalised form in the last two decades.

The 12th Plan process could have been an opportunity to change course, especially given its explicit commitment to sustainability, inclusiveness and equity. Indeed there are some glimpses of a different approach, e.g. making economic activities more responsible in their use of resources and in the wastes they produce, promoting urban water harvesting and public transport, providing organic inputs to agriculture use, encouraging recycling, making tourism more

Integrating Sustainability into Indian Planning

ENVIRONMENTal PlaNNING

Ashish Kothari

POlICy

Peoples movements, civil society

organizations, academic think-

tanks, and progressive political

leaders will have to lead the way, both by resisting

todays destructive processes and by

building on existing alternatives

environmentally responsible and community-based, moving towards low-carbon strategies, and protecting the commons (lands and waters that are used by the public), giving communities more secure rights to use and manage these. Yet the Plan falls far short of signiicant reorientation, mostly staying within the confines of assuming that more growth will help achieve these goals. It does not use any available framework of sustainable development, including the targets that India agreed to at the 2002 World Summit on Sustainable Development (Johannesberg). It does not contain indicators to gauge whether India is moving towards sustainability, e.g. improvement in per capita availability of natural forests, reduction in the levels of various kinds of pollution, improved access to nutritious food and clean water, or enhanced availability of public transport. Environmental considerations do not yet permeate each economic sector.

There is in fact a palpable lack of urgency with regard to the ecological crisis we are already

I

The author is Founder-member of Indian environmental group Kalpavriksh, and coordinated Indias National Biodiversity Strategy and Action Plan process, has served on Greenpeace International and India Boards, He is also the author or editor (singly or jointly with others) of over 30 books, the latest a detailed analysis of globalisation and its alternatives.

6 YOJANA June 2013

in. Natural ecosystems are under stress and decline across most of the country; some 10% of the countrys wildlife is threatened with extinction; agricultural biodiversity has declined by over 90% in many regions; well over half the available waterbodies are polluted beyond drinking and often beyond even agricultural use; two-thirds of the land is degraded to various levels of sub-optimal productivity; air pollution in several cities is amongst the worlds worst; modern wastes including electronic and chemical are bring produced at rates far exceeding our capacity to recycle or manage. Annual Economic Surveys of Government of India, and the Ministry of Environment and Forests annual State of Environment reports occasionally acknowledge the widespread environmental damage; more is found in independent reports such as the State of Indias Environment reports by Centre for Science and Environment. A 2008 report by the Global Footprint Network and Confederation of Indian Industries suggests that India has the worlds third biggest ecological footprint, that its resource use is already twice of its bio-capacity, and that this bio-capacity itself has declined by half in the last few decades.

Economic globalisation since 1991 has significantly increased rates of diversion of natural ecosytems for developmental purposes, and rates of resource exploitation for domestic use and exports. Climate change impacts are being felt in terms of erratic weather and coastal erosion, and the country has little in the way of climate preparedness especially for the poor who will be worst affected.

Projections based on the historic trend of materials and energy use in India also point to serious levels of domestic and global impact on the environment, if India continues it current development trajectory modeled on already industrialized countries.

One opening provided by the 2013 Economic Survey towards redressing the situation is the following paragraph: From Indias point of view, Sustainable Development Goals need to bring together development and environment into a single set of targets. The fault line, as ever in global conferences, is the inappropriate balance between environment and developmentwe could also view the SDGs and the post 2015 agenda as an opportunity for revisiting and ine-tuning the MDG framework and sustainably regaining focus on developmental issues.

Framed in 2000, the MDGs s e t a m b i t i o u s t a rg e t s f o r tackling poverty, hunger, thirst, illiteracy, womens exploitation, child mortality, disease, and environmental destruction. They are supposed to have guided the developmental and welfare policies and programmes of governments. Countries are individually, and collectively through the United Nations, reviewing progress made in achieving the MDGs. Simultaneously discuss ions have been initiated towards new development frameworks that could more effectively lead to human well-being while ensuring ecological sustainability. India too needs to engage in a full-scale review of its achievements (or failures), which can become an opportunity

to work out a new framework for the post-2015 process, best suited to Indian conditions. Here are some ideas on what such a framework could look like.

Elements of a New Global Framework

A fundamentally different framework of well-being has to be built on the tenets of ecological sustainability, as much as of equity. This is clearly pointed to in the outcome document of the UN Conference on Sustainable Development (Rio+20) of 2012. A new set of global goals could include: (1) E n s u r i n g e c o l o g i c a l

conservation and resilience, and the basis of equitable access to nature and natural resources to all peoples and communities (respecting natures own rights) (an expansion of current MDG 7);

(2) Providing adequate and nutritious food for all, through production and distribution systems that are ecologically sustainable and equitable (currently part of MDG 1);

(3) Ensuring adequate and safe water for all, through harvesting and distribution systems that are ecologically sustainable and equitable (currently part of MDG 7);

(4) Safeguarding conditions for prevention of disease, and maintenance of good health, for all, in ways that are ecologically sustainable and equitable (currently partly in MDG 6)

(5) Providing equitable access to energy sources in ways that

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are ecologically sustainable (as much as technically and economically viable) (currently missing from the MDGs);

(6) Facilitating equitable access to learning and education for all, in ways that enhance ecological sensitivity and knowledge (as much as cultural, technical, technological, socio-economic, and other aspects) (an expansion of MDG 2);

(7) E n s u r i n g s e c u r e , s a f e , sustainable, and equitable settlements for all, including adequate and appropriate shelter, sanitation, civic facilities, public transportation (currently partly in MDG 7, partly missing)

In all the above, the special needs of women and children will need to be secured, through rights-based and empowerment approaches (currently in MDGs 3,4,5).

Such a framework needs to be based on a set of universal principles, including: l The functional integrity and

resilience of the ecological processes and biological diversity underlying all life on earth, respecting which entails a realization of the ecological limits of human activity, and enshrining the right of nature and all species to survive and thrive in the conditions in which they have evolved.l Equi table access of a l l people, in current and future generations, to the conditions needed for human well-being (socio-cultural, economic, political, ecological, and in particular food, water, shelter,

clothing, energy, healthy living, and socio-cultural sustenance); equity between humans and other elements of nature; and social, economic, and environmental justice for all.

l The right of each person and community to participate meaningful ly in crucia l decisions affecting her/his/its life, and to the conditions that provide the ability for such participation, as part of a radical, participatory democracy.

l Linked to the above, governance based on subsidiarity and ecoregionalism, with local rural and urban communities (small enough for all members to take part in face-to-face decision-making) as the fundamental unit of governance, linked with each other at bioregional, ecoregional and cultural levels in to landscape/seascape institutions that are answerable to these basic units.

l The responsibility of each citizen and community to ensure meaningful decision-making that is based on the twin principles of ecological integrity and socio-economic equity.

l Respect for the diversity of environments and ecologies, species and genes, cultures, ways of living, knowledge systems, values, economies and livelihoods, and polities, in so far as they are in consonance with the principles of sustainability and equity. l Collective and co-operative thinking and working founded

on the socio-cultural, economic, and ecological commons, respecting both common custodianship and individual freedoms and innovations within such collectivities.

l The ability of communities and humanity as a whole, to respond, adapt and sustain the resilience needed to maintain ecological sustainability and equity in the face of external and internal forces of change.

l The inex t r i cab le in ter-connectedness amongst various aspects of human civilisation, and therefore amongst any set of development or well-being goals: environmental, economic, social, cultural, and political.

A Framework for India

Following from the above, the following goals would comprise a new sustainability framework of planning for India:

Macro-economic policy: The macro-economic framework must be radically altered to put ecological sustainability, human well-being, and socio-economic equity at the core. This would include development of macro-economic theories and concepts that put at their core the twin imperatives of ecological limits and socio-economic equity. It would also entail reorienting inancial measures such as taxation, subsidies, and other iscal incentives/disincentives to support ecological sustainability and related human security and equity goals. A long-term national land and water use plan needs to be framed, based on decentralised and participatory processes. Also

8 YOJANA June 2013

needed are human well-being indicators, through appropriate tools, to replace the current GDP and economic growth-related ones.

Political governance: Equally important as above, a new polity is needed. Principles and practice of radical or participatory democracy need to infuse all decision-making, with the smallest rural and urban settlements as the basic units, and landscape level institutions building on these. Panchayat, urban ward, and tribal council institutions would need not only strengthening but modifications to ensure they are functioning at these basic units in which all residents/members can take part. Ways to ensure accountability of representatives (e.g. through right to recall) at larger levels, upto the national level, have to be built in. An immediate step could be creating institutions of independent oversight on environmental matters, such as an office of an Environment (or Sustainable Well-Being) Commissioner who has a Constitutional status similar to the CAG or Chief Election Commissioner.

Safeguarding the natural basis of life: The integrity of natural ecosystems, wildlife populations, a n d b i o d i v e r s i t y, m u s t b e safeguarded, by reducing and eventually eliminating resource and biodiversity loss, and regenerating d e g r a d e d e c o s y s t e m s a n d populations. This would include providing rights to nature and non-human species in the Constitution; expanding the coverage of areas specially dedicated to or helping to

achieve biodiversity conservation through fully participatory and democratic means; integrating conservation principles and practices in land/water use activities across the board, in both rural and urban areas; and phasing out the use of chemicals in agriculture, industry, and settlements, that lead to irreversible ecological degradation and the poisoning of wildlife.

Ensuring basic needs for all: All people must have access to safe and adequate resources to fulfill basic needs, in ways that are ecologically sustainable and cul tural ly appropriate . This includes safe and adequate drinking water to all, largely through decentralised harvesting and distribution systems; safe and adequate food to all, focusing primarily on agro-ecologically sound practices and localized production/distribution systems including localized procurement for the Public Distribution System and other food schemes for the poor; unpolluted air and safe sound levels for all; safe, adequate and sustainable shelter/housing to all, facilitating community-based, locally appropriate methods; energy security for all, optimizing existing production sources and distribution channels, regulating demand (denying, especially, luxury demand), and focusing most new production on decentralised, renewable sources; and adequate sanitation facilities to all families and communities.

E n s u r i n g u n i v e r s a l employment and livelihoods: All families and communities must have access to dignified

livelihoods that are ecologically sus ta inab le and cu l tura l l y appropr ia te . This inc ludes encouraging natural resource based livelihoods (forest-based, isheries, pastoralism, agriculture, crafts, and quarrying) that are already ecologically sustainable; replacing unsustainable, unsafe and undignified livelihoods in all sectors by digniied, green jobs (which according to ILO would yield more employment than conventional sectors); and investing heavily in livelihoods relating to ecological regeneration and restoration.

E n s u r i n g s u s t a i n a b l e production and consumption: All production and consumption must be ecologically sustainable and socio-economically equitable, using a mix of incentives and d i s i n c e n t i v e s . T h i s m e a n s c o n v e r t i n g a n d r e p l a c i n g unsus ta inab le ag r icu l tu ra l , fisheries, mining, industrial, and other production processes to sustainable ones; ensuring extended producer responsibility for sustainability at all stages from raw materials to disposal/recycling/reuse, through incentives and legislation; curbing unsustainable c o n s u m p t i o n i n c l u d i n g advertising that encourages such consumption (perhaps creating an Above Consumption Line measure as counterpoint to Below Poverty Line measure; encouraging innovations in, and making mandatory the use of, technologies of sustainability including those that reduce resource-intensity of products and processes, and discourage

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(eventually eliminating) those that are inherently unsustainable and inequitable; and moving towards a zero-waste society.

E n s u r i n g s u s t a i n a b l e infrastructure: All infrastructure development must be ecologically sustainable and socio-economically equitable. This entails integrating practices of sustainability into existing infrastructure, replacing unsustainable practices with sustainable ones (e.g. focus on public instead of private transportation); and ensuring all new infrastructure is built on principles of ecological sustainability.

Ensuring sustainability in services and welfare: All service and welfare sectors must integrate principles and pract ices of ecological sustainability. Health services should focus on preventing ill-health due to environmental degradat ion (e .g. unsafe or inadequate food and water), and on curative practices that are ecologically sound (including nature-based indigenous systems). Local and wider ecological, cultural, and knowledge systems need to be integrated into education policies and practices, ensuring that ecological sensitivity becomes a part of every subject. Tourism and visitation need to be converted to practices that are ecologically sustainable, culturally appropriate, and local community driven.

Each of these goals will contain speciic targets and actions, and indicators to assess levels of success and failure. A set of tools are also needed that can help in the assessments. There are already several sets of indicators

and tools being used or proposed around the world (including within India), from which we could develop a set of indexes that is robust, relatively easy to calculate, amenable to public understanding and participation, and capable of integrating complexity and nuances. Some of the exciting new work being done outside India, such as the Happy Planet Index proposed by the New Economics Foundation, Bhutans Gross Nat iona l Happiness , Environment Vulnerability Index, and others could be examined. Tools such as Ecological/Carbon Footprints, National Accounts of Well-being, Environmental Accounting and Budgeting, and so on could be combined to assess progress towards sustainability and equity. But this should not simply become an exercise in numerical target-setting, and mechanical enumeration of what targets have been met; it needs to integrate into a holistic vision that has sustainability, equity, and well-being as its pillars.

Overcoming the hurdles

There are several hurdles to achieving the above: inadequate understanding of the impacts of human activities on the environment, continuing tension between various knowledge systems hampering synergistic innovation, a political leadership that for the most part lacks ecological literacy, unaccountable corporate and military power, and a feeling of helplessness or apathy amongst the general public.

If we are to surmount these hurdles, we have to support and learn from alternatives already existing on the ground or in policy,

in India or globally. Information already available on trends in sustainability and unsustainability should be collated, and further information generated to ill gaps in understanding. Public discussions and consultations, involving all sections and in particular local communities in rural and urban areas, should be initiated on the contours of a new framework of well-being. Such a framework should underlie the 13th 5-Year plan.

Of course, this will not happen if left to todays political and bureaucratic leadership, though undoubtedly their role is vital. Most crucial is public and political mobi l iza t ion and pressure . Peoples movements, civil society organizations, academic think-tanks, and progressive political leaders will have to lead the way, both by resisting todays destructive processes and by building on existing alternatives. Partnerships with similar sectors in other countries will help.

India already has thousands of initiatives at solving food, water, energy, health and other problems through sustainable means; it also has crucial policy breakthroughs like the Right to Information Act. But these are dispersed and often isolated, not yet forming a critical mass sufficient to bring about fundamental changes in the system. A framework vision of the kind outlined above is beginning to emerge from, and could help bind together, these currently dispersed processes. q

(E-mail :ashishkothari@vsnl.com)

YOJANA June 2013 11

RECALL MY first national publication in Yojana in June 1993 issue which r e v i e w e d t h e eficacy and status of

Indias environmental legislation, following the strategic article by then Prime Minister Late Sri Narsimha Rao depicting the concern on environment and extrapolating it for sustainability of economic growth. India has a prestigious history on environmental fronts be it the Stockholm Conference in 1972 which was attended by Late Smt. Indira Gandhi, or the UN Conference on Environment and Development, 1992 at Brazil where Indias contribution and eco-concerns also igured in shaping the historic Agenda 21. It was in 1991 that the Honble Supreme Court issued a directive for compulsory environmental studies in all undergraduate programmes in the country. It is regretable that it hasnt been uniformly implemented even with the passage of two decades. In another article on environmental policy concerns in Yojana in 1996 February, I tried help prioritize the issues for immediate concerns.

Climate Risk: Critical Challenges

ENVIRONMENT aND SuSTaINablE ECOlOGy

Anil Kumar Gupta

ChallENGES

No model of economic growth can sustain for

long if it doesnt respect ecology in local and regional

context, and at the same time the environment as broad concern including the

inter-relationships of natural,

human-made and socio-cultural environments

There are signiicant efforts to promote green cover in urban areas with noted success, but at the same time vast tracts of natural green cover of forests and rural areas have been lost owing to increasing biotic pressure, low regeneration and devastating side effects of poorly planned developmental projects. India has a new water policy of 2012 now, but without subjecting it to a formal system of environmental assessment , despi te having globally accepted tool strategic environmental assessment (EIA of policies and plans) in practice. I wrote in Yojana May, 2000 on water policy and integrated water management calling for a system approach, which in turn also calls for coherence of water, land, energy and forest related policies with the broad environment policy. Fortunately the environment policy of 2006 at least mentioned this. The recent reinforced calls at global level to integrate disaster risk reduction and climate change issues within the broad umbrella of environmental management for sustainability and inclusive growth has attained momentum with the UN led Partnership of Environment

I

The author is Senior Associate Professor of Policy Planning at National Institute of Disaster Management, New Delhi, and President of Centre for Disaster Management, Environment and Sustainability, New Delhi.

12 YOJANA June 2013

and Disaster Risk Reduction (UN-PEDRR). Climate Risk and Indias Environment

Whereas many regions are likely to experience adverse effects of climate change of which some are potentially irreversible, in some cases certain impacts are likely to be beneicial as well. The World Bank Study entitled Managing C l i m a t e R i s k : I n t e g r a t i n g Adaptation into World Bank Group Operations identiied the result of environmental changes in South Asia as following:l Decreased water availability

and water quality in many arid and semi-arid regions

l Increased risk of floods, droughts, and water borne diseases / epidemics

l Reduction of water regulation in mountain habitats

l Decrease in reliability of hydropower and biomass production

l Increased damages and deaths caused by extreme weather events

l D e c r e a s e a g r i c u l t u r e productivity, in isheries and sustainability of ecosystems

The World Bank interpreted the consequences of these impacts in form of severe economic shocks, which will exacerbate existing social and environmental problems, and migration within and across national borders.

So far most policy interventions related to climate change were mitigation centric and broadly based on geophysical parameters. However, the focus is now shifting towards vulnerability

reduction centric and adaptation approach which at the same time facilitates climate change mitigation-adaptation convergence with disaster risk reduction. The Millennium Ecosystem Assessment (2005) that emphasized livelihood and food security as key challenges of human vulnerability is an insight to understand the significant efforts of Intergovernmental Panel on Climate Change (IPCC), in particular the 4th Assessment Report and the recent Special Report on Extreme Weather Events (SREX) to draw the concerns for South Asia and more particularly for India.

A 4x4 assessment of climate change impacts on India, organized by Ministry of Environment & Forests (2010) has concluded with serious concerns on impacts on agriculture, water security, health and forests, more particularly in Himalayan region and coastal areas. The impacts have been observed in terms of changing rainfall patterns, intensity, number of rainy days, hottest and coldest days, hot/cold waves, sea level rise, cyclonic storms, etc., whereas improper land use coupled with ecological degradation has aggravated peoples vulnerability to these climatic and the other geophysical disasters like earthquake, landslides, etc.

Besides the availability concern, quality of water (be it ground or surface waters) is critical in health and agriculture. Air quality is deteriorating despite the efforts governments made over past decades. Waste management situation in many cities of the country has improved but is far from satisfactory, and urban flooding has become a common annual menace.

Ecosystem Services: Economy and Livelihoods

The environmental problems in India are growing rapidly. The increasing economic development and a rapidly growing population that has taken the country from 300 million people in 1947 to more than one billion people today is putting a strain on the environment, infrastructure, and the countrys natural resources. The Global Assessment Report on Disaster Risk Reduction: Risk and Poverty in a Changing Climate (2009) identiies ecosystem decline as a key driver in exacerbating natural hazards in the future. Indian economy is likely to grow at 6.4 per cent rate in 2013 outpacing the 6 per cent expansion in developing Asia-Paciic economies in the same period. However, the current projected growth is below its own pace of the past. The global economic slowdown starting 2008 has made us to review on the limitations our ecological systems and non-renewable resources pose to our economic growth. We need to analyze our iscal balance sheets again for expenditures on managing the challenges arising as a consequence of environmental degradation on different time-scales.

India is now the worlds third biggest carbon dioxide emitting nation after China and the US. The new emission data from the United Nations published in early October 2010 is a probable cause of worry for Indias climate negations in the future. The ecosystem based approaches for adaptation and mitigation are the noble options we still have. We need to evolve approaches where we have mitigation values for the adaptation options and strategies as well,

YOJANA June 2013 13

and at the same time disaster risk reduction as the beneit. We have not only spoiled our wetlands and river systems, but the entire land-soil system, making it chemical intensive in its composition in quest of immediate high returns.

Green revolution was needed as India then needed food to feed the people. Now the concept of 2nd green revolution has to be built up with great caution and concerns for sustainability. Natural resource related activities form major livelihood for Indias population. Land, water and bio-productivity cannot be dealt in isolation. The Millennium Ecosystem Assessment (2005) refers to natural systems as humanitys life support system providing essential ecosystem services for existence and socio-economic well being. Twenty four services are classiied under major four categories:a) Provisioning services, the

material that people extract directly from ecosystems such as food, water, and forest products;

b) Regulating services, which modulate changes in climate and regulate loods, drought, disease, waste and water quality;

c) Cultural services, which consis ts of recreat ional ( tourism), aesthet ic and spiritual beneits, and

d) Supporting services, such as soil formation, photosynthesis (food production, oxygen generation) and nutrient recycling.

Human Security and Disaster Management

The World Summit on Social

Development (2005) noted the reconciliation of environmental, social equity and economic demands as the three pillars of sustainability. An imbalance in one or more of these may exacerbate the impact of a natural or impending humanitarian crisis, resulting in a disaster like situation. The challenges of naxalism may be understood in ecological terms of forests, people and livelihoods, which due to our failure to address, have grown up to emergent state in such areas. Environmental refugees from the regions affected by natural calamities, insurgencies, or due to developmental interventions like in case of large dams, or migrants for livelihoods are one of key humanitarian concerns worldwide as well as in India.

Poor, down t rodden and marginalized people, landless, or those occupying low cost but hazardous locations for their housing and occupations, are the ones most and worst affected by natural disasters like earthquake, loods, drought, cyclone and diseases. Relationships between environment and disasters are inextricable. We need to understand the ecology of conlicts, vulnerability, human behavior, and thereby of the disasters, for their effective and preventive management.

It is worthwhile to mention that our initiative in India during 2008-9 on integrated environment and disaster risk management, when noticed by the United Nations Environment Programme (UNEP), was followed by a high level meeting at the UN Campus Bonn in Germany, to evolve a UN Partnership of Environment and Disaster Risk Reduction. First capacity building programme on

Ecosystem Approach to Disaster Risk Reduction (ecoDRR) was piloted in Sri Lanka and followed by New Delhi in 2011 itself. Recent release of Disaster Management and Risk Reduction (2013) as follow up to the Government of India publication (NIDM) on Ecosystem Approach to Disaster Risk Reduction (2013), that related to United Nations University (UNU) bringing a special volume entitled Role of Ecosystems in Disaster Risk Reduction.

Issues of Critical Concern

Looking to the present state of Indias environment and context of climate-change, disasters and corporate environmental governance, following issues have been identiied for critical concern in academia and policy planning:1. N a t u r a l d i s a s t e r

management: Number of natural disasters continue to rise in India and the region, with heavy toll on human lives, environment and economies. Losses due to water and climate related disasters far exceed that of purely geophysical ones. On the other hand, chemical intensive economic development has increased the risk of industrial-chemical disasters. Disaster management needs to be a priority subject for intervention as it has great humanitarian aspects.

2. Environmental-Health : Despite the need, the aspects of environmental health including those related with water, sanitation, waste management, t o x i c o l o g y, h a s b e e n inadequately addressed due to lack of policy intervention. We need to have integrated

14 YOJANA June 2013

policy direction on preventive and social health issues in the country.

3. Natural Resource Systems: Be it a river, a wetland, forest, land or soil, urban area or a crop field, the management of natural resources need to be evolved with consideration of these as system and with the scientiic understanding of resource rather than treating them primarily as source.

4. Environmental liability: E n v i r o n m e n t a l p o l i c y implementation cannot be effective unless the concept of absolute liability is enforced not only in context of industrial hazards or pollution but equally in relation to ecosystem integrity, sustainability and natural resources. Liability should be integrated with accountability and must also include the Government, monitoring agencies and decision makers.

5. State/District Environmental Action Plans: We have Nat ional Environmental Protection Act (1986) but could not regulate the mandate for environmental action plan at state, district and local levels. This is an emergent need. Plan should have a time frame,

6. EIA and SEA improvements: E n v i r o n m e n t a l i m p a c t assessment is an effective and noble instrument of policy and legal enforcement but, however, is under question in India due to its marketplace image. It requires scientific and academic community to come forward together to intervene and take up research studies on validation

of such reports. Another approach where EIAs are done by Government agencies responsible for decision making may also be thought of, but with ixing accountability for their interpretations. Strategic Environmental Assessment (SEA) is a recognized tool for environmental screening of policies, plans and programmes in practice in particular in advanced countr ies . On initiative of UNU and UNEP, we have worked out a protocol for EIA and SEA application in disaster management. Recently, Sri Lanka carried out an SEA of its North Province before launching post-conlict developmental plan. We need to learn and evolve to scrutinize our economic and other strategic decisions for their impacts on different aspects of environmental quality and resources.

7. Environmenta l Audi t : Environmenta l audi t in mandatory terms is a formal procedure in India, except big industries and corporations conducting detailed audits voluntar i ly. Pract ice of comprehensive environmental auditing must be compulsory for all industries, establishments including housing complexes, municipalities, and institutions with signiicant water, energy and material balance or involving hazards.

8. N a t u r a l R e s o u r c e Accounting: The concept and practice of natural resource accounting or green accounting was mooted and pilot studies undertaken during 1990s.

However, the practice didnt continue to grow. The concept of green accounting and green GDP must be integrated wi th nat ional and s ta te environmental action planning as well as with developmental planning.

9. Economic evaluation of environmental impacts: In the absence of proper economic evaluation, environmental impacts and hazards are not given due importance in planning and decision making. For example, the environmental damages and losses due to disasters and environmental needs following a disaster situation havent been evaluated on economic terms. This results in their undermining. The practice of ecological economics needs to be promoted in research, planning and monitoring of developmental plans and policies.

10. Ecological Auditing (Eco-Audit): This is rather a new tool , extended from the principle evolved a decade ago. This focuses on auditing of natural resource systems and environmental quality aspects on ecosystem approach. This takes into account the ecosystem capacities, services and related sustainability parameters in the context of internal, external and human-induced factors.

Revisiting Economic Growth to Sustainability

Sustainability is the capacity to endure. In ecology it describes how biological systems remain diverse and productive over time.

YOJANA June 2013 15

For humans, sustainability is the potential for long-term maintenance of well being, which has ecological, economic, political and cultural dimensions. Healthy ecosystems and environments are necessary to the survival and lourishing of humans and other organisms. Chennai based Centre for Development Finance has developed Environmental Sustainability Index 2011 for Indian states considering the achievements, challenges, priorities and present state of environment. The study found the north-eastern states as most sustainable whereas the least sustainable states are Bihar, Haryana, Gujarat, Punjab, Rajasthan & Uttar Pradesh.

Poverty, disparity and inequality are key factors that aggravate peoples vulnerability to hazard be it of a natural, human-induced, technological or socio-political origin that may result in a devastating situation or crisis. These factors are in turn aggravated by ecological deprivation and poor management of natural resources, coupled with infrastructure disparities brought in by the techno-iscal intensiication. No model of economic growth can sustain for long if it doesnt respect ecology in local and regional context, and at the same time the environment as broad concern including the inter-relationships of natural, human-made and socio-cultural environments. Unless we understand the ecological basis of conflicts and evolution of local/regional terrorism, we often fail to ind sustainable ceaseire solutions. Alternative models of sustainable land use economies need to be worked out taking care of climate change adaptation and disaster risk concerns as well.

Sustainability interfaces with

economics through the social and environmental consequences of an economic activity. Sustainability economics involves ecological economics where socio-cultural, economic and health-related aspects are integrated. Now, in the times when we are calling for Integrated district planning process, we need to evolve the models and protocols for ecological compatible integrated planning at state, district and local levels. At the same time, it is important to recognize the ecosystem relations between urban, rural and industrial development planning. Figure 1 shows economics as a function within social arena of the environment as recognized by Scott Cato (Green Economics, 2009, Earthscan). Adams (2006) enumerated the pressure balance among environment, economics and social functions under a sustainability framework (International Union for Conservation of Nature, Figure 2). However, environmental economics new focus is on the economic valuation of ecosystem services

in immediate and long-term parameters that helps understand need for ecological sensitive developmental planning process. In India as well, the concept of Green GDP is upcoming which should help promote sustainability concerns into developmental economics as well.

N a t i o n a l E n v i r o n m e n t a l Protection Agency

Disaster management is a state subject, whereas environment is a broad concern divided and shared between central, states and concurrent lists, in the schedules of Indias Constitution. In most cases States enjoy the powers delegated by Central Government. Therefore, an apex agency should not be only an authority to develop broad policies and guidelines but also its own standards, and need to be responsible and accountable for their proper and effective implementation at the ground levels as well. We need to learn from the United States model of Environmental Protection Agency. Pollution Control Board concepts are obsolete and need to be abolished to bring a cultural change in environmental management, by replacing it with Environmental Protection Agencies with a uniform institutional framework at State, district and Urban local bodies level. It is also important that a standard ratio of scientiic, technical and social experts is maintained in these agencies at all the levels.

Policy Interventions: National Environmental Council

Broad Paradigm Shift is needed from fragmented and spontaneous response or wait until emergent approach to accountability and liability based proactive culture of prevention and infused mitigation

Figure 2: Sustainability challenge is of the balance in a win-win mode

Figure 1: Economy as a function within society and environment

16 YOJANA June 2013

approach on environmental protection affairs including climate-change, natural disaster management, chemical safety, environmental health and overall natural resource management system. Prime Ministers Council of Climate Change may be renamed as Prime Minister s National Environmental Council offering an umbrella coordination of Ministries like Environment and Forests, Earth Science, Science & Technology, environment related divisions of DST, ICAR, ICMR, DBT, CSIR, ICFRE, ICSSR, UGC, National Biodiversity Board, etc. and international organizations like UNEP, IPCC, WMO, WHO, UNDP, UNESCO, etc.

Development and promotion of environmentally compatible models for inclusive growth and sustainable economic development at village, taluka and district levels may be a key objective. Intensive and effective drives of capacity building and awareness shall be needed to attain its objectives. A policy guideline on environmentally compatible integrated district-planning need to be developed. It is ironical to note that India as a country 'though loud enough in global platforms of Stockholm and Rio de Janeiro' has missed to represent ecology in its constitution of strategic and planning organizations like Planning Commission, National Disaster Management Authority, National Investment Agency, etc. The time has come when we need to be sensitive to own long-term sustainability and feel accountable for all our deeds.

Education and Research

Environmental research in the country is fragmented with much of duplicacy, gaps and sometime

with conflicting conclusions. The proposed National Council and National University may be mandated to share the strategic responsibility of organizing and coordinating with the relevant agencies a broad network forum to avoid these challenges. Some of the states/UTs have integrated their science & technology councils with environment, and is a welcome move. University and college curriculum of environmental studies need to be diversified to meet specialized needs for professionals on its sub-disciplines, viz. environmental health, system ecology, climate change, disaster management, EIA, law & policy, environmental economics, industrial hazards, etc.

Education and training in environmental studies need be diversiied with specializations at University/college levels to focus on emergency issues and challenges. Our experts and Governments have taken a great steps towards environmental awareness of the masses including college youth and children, but could not mandate a compulsory orientation of our legislators and Government oficials of all levels including sub-district and local levels who built up the administrative priorities of the governance. This is one reason of increasing conlicts between public or civil society and Government as their perceptions do not match at all.

N a t i o n a l U n i v e r s i t y o n Environment and Sustainability

For more than two decades, there has been a demand for a central institution on environmental research and training which at the same time shall award degrees and professional certification in

the areas of environment. In the present times, when disasters, climate change and health risks are emergency challenges, a National University on Environment and Sustainability Studies (UNEST) need to be established by the Central Government to cater the needs of quality research, training and education leading to masters and research degrees, and will extend advisory support in assessments, planning and policy making. The institute may be mandated also to host a forum for organizations and institutions working on environment, climate change and disaster management issues in the country, to facilitate exchange of knowledge, skills, and professional value addition.

University Grants Commission has supported Universities and institutions on innovative course and research programmes on concurrent issues in environmental sciences and notified a model curriculum on disaster management for all undergraduate course in the lines of compulsory environmental studies. Ministry of Environment and Forests and Ministry of Earth Sciences have also schemes to support environment and climate research. United Nations Environment Programme has expressed concern in promoting the ecoDRR curriculum in Indian Universities which has already been included in other countries. Recently, UNESCO has established a high level academic institute, first in Asia, Mahatma Gandhi Institute of Environment, Peace and Sustainability which will organize and conduct courses and research on environment, climate and disaster related issues of Asian concern. q

(E-mail : envirosafe2007@gmail.com)

18 YOJANA June 2013

FEDERAL SET up is considered to be an optimal form of government as i t combines the strength of a unitary

as well as a decentralized form of government. The essence of federalism lies in proper division of powers and functions among various levels of government to ensure adequate financial resources to each leve l o f government to enable them to perform their exclusive functions. In a federation, both developed and underdeveloped federating units find it advantageous to remain within a federation due to various reasons like uniied market facility, security and inancial cooperation. In India, federalism has evolved from a highly centralized system under the British regime-Lord Mayo inancial resolution of 1871, to a three-tier form of federation.

Evolution of Centre-States Relations

The present federal iscal system has not evolved in a day or two but over a long period of time starting from the late eighteenth century.

Changing Dynamics of Centre-State Financial Relations

CENTRE-STaTE RElaTIONS

Pravakar SahooAmrita Sarkar

SPECIal aRTIClE

India has evolved a noble kind of

federation which is completely

different from the accepted notion

of federation. The evolved Indian

federalism is very unique in character

and the Union-state relationship has also become

extremely complex over the years

Though the Government of India Act-1919 was a major breakthrough in the history of evolution of fiscal federalism in India, the Government of India Act-1935 established a clear-cut demarcation of subjects coming under the Centre, States and, both Centre and States. With the independence of the country, the federal status of India underwent a fundamental change with clear division of inancial powers and expenditure responsibilities between Central and State governments in the Seventh Schedule of the Indian constitution.

The undivided Indian National Congress under Nehru (1947-66) in the irst two decades led to a strong central leadership and the Centre developed the concept of a patriarch controlling the Indian federation. The Centre-state relations were simply a relection of relations between the state branches of the congress party and its central leadership. However, over the last 60 years many changes have been incorporated in the Indian federation through different const i tu t ional amendments ,

A

Pravakar Sahoo is an Associate Professor, Institute of Economic Growth, Delhi University. Amrita Sarkar is an intern with the Institute of Economic Growth, Delhi.

YOJANA June 2013 19

changes in criteria for devolution of resources etc to fulfill the objectives of iscal federalism viz., reducing fiscal imbalances and ensuring provision of equal level of public services like education, health etc across all states at similar rate of taxes.

The most important aspect of iscal federalism is the division of resources and functions between different levels of governments. The existence of iscal imbalances i s inheren t in mos t o f the federations since the division of resources goes in favour of the central government to achieve the objectives of stabilization and distribution. Similar is the case of Indian federalism where there is a mismatch of resources and expenditure responsibilities at different layers of government. Though in ter-governmenta l transfers take place to reduce iscal imbalances and provide average level of public services across the sub-national governments, there exist iscal imbalances and regional disparities across the states even after 60 years of independence. The transfers from Centre to

States take place through three channels, namely, Union Finance Commission (UFC), Planning Commission (PC) and Central Ministries, of which the transfers from FC are predominant. Gross devolution and transfers (GDT) comprises of States share in central taxes (SCT), grants-in-aid and gross loans from centre. Gross Transfers to the states have been rising over past decades except for a dip in 2011-12.

T h e U F C a n d P C t a k e equalization as the most important general objective while making federal iscal transfers. Therefore as required from time to time, different UFCs and PCs keep changing the method of federal fiscal transfers to ensure the objective of equalization. Different approaches by different UFCs have differential impact on the resource transfers to the states. The tax sharing is based on the general criteria like population, geography, backwardness, poverty ratio, inverse per capita income, distance formula, revenue gap etc. After the seventh FC, the high (almost 90%) weightage given

to population has been gradually lowered and alternative measures such as inverse formula and distant formula have been given more importance in sharing both income and union excise duties. However, these criteria have been multiplied by the scale factor population thereby giving more importance to population.

The dependence of states on Central transfers varies depending on the capacity of the states to generate own resources. For high income states it varies from one-fourth to one-sixth of their revenues, for middle-income states between one-third to one-fifth (except for Chhattisgarh and West Bengal where dependency is much higher, almost 40-50%) and for low-income states it is quiet high ranging from 42-80%. In case of Special Category States, these Central transfers are very high varying from 64.98% to almost 93% of their revenue receipts. Haryana is the least dependent State on central transfers, followed by Punjab, Maharashtra, Gujarat and Goa. Given the need of the states, FC has been trying to

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YOJANA June 2013 21

Governments, India has 2.5 lakh local governments, comprising over th ree mi l l ion e lec ted representatives which makes India the largest democratic and federal country. The signiicance of the local bodies is measured in terms of the percentage of local governments to total public sector expenditure and share of local government expenditure to GDP. Compared to other countries in the world, India stands at the lower end of the spectrum with a share of local governments at only 5.1% of total public sector expenditure (Brazil-15%; OECD-20 to 30%). In fact this share has declined by over 20% in last ive years (from 6.4% in 1998-99). The constitution spells out the task to the State Fiscal Commission (SFCs) to provide recommendations for the PRI institutions, both urban and rural, so that the consolidated fund can be augmented accordingly. However, it appears that most SFCs do not take their instrumental role seriously in helping to provide the said services and in laying the foundations for participatory democracy in the country.

All UFCs have indicated several shortcomings and omission and commission of the SFCs. The main reasons are non-synchronization of the period of recommendation of SFCs and UFCs; lack of clarity in respect of the assignment of powers, authority and responsibilities of the local government; absence of time limit to take appropriate action; etc. The 13 th

UFC has made a signiicant change in the devolution of resources to the third tier by assigning a share of the divisible tax revenue. This share is on an average 1.93% of

the divisible pool of taxes for the period 2010-15. However, this devolution is a weak surrogate to cover up the failure of 13th UFC to employ a comprehensive measure of decentralisation. The criticism of THFC is the use of Census 2001 numbers for calculating population shares of local grants-in-aid.

Though there is no substantial information available about the administrative and financial eficiency of the PRIs in the state to carry out the responsibilities, it is generally believed that PRIs cannot function on their own due to lack of administrative and infrastructural facilities. Given the expenditure decentralization ratio and revenue mobilization by PRIs in the state, local bodies are not in a position to carry out the assigned expenditure responsibilities. Since the amount of grants and share in the taxes given through SFCs is very low, central government needs to transfer more funds to the consolidated fund of the State to fulfill the needs of PRIs. At the same time, as more and more of the states expenditure of the rural/urban local government is met by transfers from central government the autonomy of the states diminish likewise showing clear signs of the dependency syndrome. The magnitude and trend of the percentage of the central transfers to expenditure of the local bodies in 2007-08 for a few of the states are as follows : Andhra Pradesh 51.8%; Assam- 87%; Bihar 90.7%; MP-65%; Orissa-71.6%; Tamil Nadu- 39.4% and West Bengal 47.8%.

Regional Disparity

There is wide variance in the provision of basic services like

education, medical and other infrastructural facilities leading to discrepancies in major socio-economic indicators like literacy rate, infant mortality rate, poverty ratio, and life expectancy etc. For example the highest IMR (per 1000 births) can be seen in lower income states such as Madhya Pradesh (2009) 67, Orissa (65), UP (63), Assam (61), Rajasthan (59) respectively where as it is much better in middle income and higher income states. Similar is the case of life expectancy and maternal mortality rate. A few states were able to attract investment (both domestic and foreign) and do better due to market reforms as well as their fiscal abilities to provide incentives and other utilities during post reforms period. Moreover, substantial changes in sectoral origin of income without appropriate re-distribution of population has created inequality both across the states and also within the states. Infact, India is currently in the first phase, the phase of increasing income inequality, of the inverted U of Kuznets curve. Therefore the role of central transfers to states is very important for ensuring provision of public services at a similar rate of taxation. It seems that the central transfers or centre-states financial relations has not been very successful in fulilling the the main objective .i.e. to ensure equal provision of public services across sub-national government by reducing iscal imbalances.13th Financial Commission

With the increasing inequality and requ i rement fo r f i sca l discipline and macroeconomic

22 YOJANA June 2013

stability, the scope of the 13 th UFC was much wider than any of the preceding UFCs. Besides the usual tax devolution and grants to ill the gaps in non-plan budgetary expenditure, it was expected to recommend several other grants for local bodies, grants dealing with environmental and non-environmental issues, and also design and implementation of the GST. It has placed the centre and more so, the states, in a multitude of conditions to micro-manage their iscal system. These include iscal consolidation, disaster relief, design and implementation of GST and specific problems accruing to specific states. If properly implemented, the conditionalities can be very effective in rationalizing the spending priorities of the States to ensure provision of minimum amount and standard of public services. However, complying and enforcing the conditions is a major challenge and some states have questioned the conditionalities in terms of their iscal autonomy. THFC has enhanced the vertical devolution from 30.5% to 32% of the divisible pool of taxes. The horizontal distribution of this transfer is categorized as area (10%), population(25%), iscal capacity(47.5%) and index of iscal discipline(17.5%). Even after attaching high weights to iscal capacity index, the horizontal formula has failed to increase aggregate share of devolution to low-income states, which remains stagnant at around 54% over the period of past three UFCs. This is while the shares of middle-income states have declined from 29.28% in 11th

UFC to 25.8% in 13th UFC and share of high-income has

increased from 9.75% to 11.19% during the same period.

Wi t h t h e o b j e c t i v e o f maintaining long term stability in the relative share of centre and states in the total revenues, 13th UFC have set the target for transfers from all sources at 39.5%, marginally higher than the 12th FC (38%) which would be close to 4% of the estimated GDP. The centre is receiving huge revenues from sources such as telecom auctions of which the states get no share. There is also increase in the number of centrally sponsored schemes involving huge expenditure which exceeds the set limit. All this is going to reduce the relative share of the states sharply (Rao, 2010). The approach followed by 13th UFC is not very different from the past UFCs as the recommendations are made on the basis of projections made on actual revenues and non-plan revenue expenditures on a base year rather than estimating the iscal capacities and the needs of the state for determining the transfers, which is not right.

Deviating from past UFCs, 13th UFC estimate entitlements based on iscal capacity accords the factor a weight of 47.55 of the total estimation. This approach does not solve the issues regarding the earlier gap-illing approach and in fact has both conceptual and methodical glitches. The arguments given by 13th UFC in this regard are not convincing and it could have done well by using a better measure of iscal capacity than simply taking the average tax-GSDP ratio of the state as the norm (Rao, 2010).

The objective of the transfers is to enable the states to provide comparable levels of services at comparable tax rates. But the 13th UFC does not make enough efforts to fulill this criteria and in fact continues with the gap-illing which has in the past always affected the equity and incentives of the states adversely. Unlike the recommendation of 12th UFC of debt write-offs and rescheduling linked to iscal adjustment, 13th UFC conditions on the states do not entail any incentive payments except in the case of those that did not pass iscal responsibility legislation as required by 12th FC. Thus there is a issue in design and implementation.

Further, the 13th UFC report and recommendations have been criticized on many grounds. 13th UFC has recommended different iscal adjustment path for Kerala, Punjab, and West Bengal which are states with high iscal deicits. Among the 11 special category states, different iscal adjustments have been suggested for Jammu & Kashmir, Manipur, Nagaland, Sikkim, Uttarakhand and Mizoram. The 13 th UFC base year for estimating iscal discipline path is selective which is not fair and subjective in nature (Rao, 2010). On the other hand, existence of fiscal capacity distance and an index of fiscal discipline in the same horizontal distribution formula is a contradiction to achieving horizontal equity. This is because while the first tries to increase the iscal capacity of the states, the second limits their expenditure according to their revenue. 13th UFC prescribes a GST model for the country which

YOJANA June 2013 23

does not fall in Finance Commission domain. Further, it assumes that GST would be revenue neutral to both centre and states, thereby ignoring to incorporate the impact of GST on the rest of its recommendations.

Fourteenth Finance Commission

The role of 14th UFC is mandated with more burdensome responsibilities in iscal, economic and social areas. The 14th UFC has been asked even to suggest measures to raise tax ratios of both Centre and States, improve performance of public sector enterprises, tackle challenges in ecology, environment and climate change. Also it is supposed to suggest measures to amend the FRBMA keeping in view its shortcomings. It has to address the rising trend of widening inequality in government spending across states and take action towards iscal autonomy, which has been substantially eroded over the years by the implementation of iscal consolidation path since the 10th UFC. It has got the job to assess the impact of GST and device a compensation mechanism for both centre and states and take the states in conidence, so that it can have higher acceptability.

Overall, though efforts have been made towards a full-fledged federation, India continues to have greater vertical iscal imbalances at different levels of governments and horizontal iscal imbalance across the levels of governments. India has evolved a noble kind of federation which is completely different from the accepted notion of federation. The evolved Indian federalism is very unique in character and the Union-state relationship has also become extremely complex over the years. The role of PC, constitutional mechanism and working of various institutions will determine the future of Indian federation. The rising inequality in an increasingly market economy demands scientiic approach for iscal transfers from Centre to states so that the objectives of iscal federalism of equality and the provision of providing public goods across states is ensured. There are few issues which remain in the domain of centre-states inancial relations such as multiple channels of transfer; limited scope of UFC transfers; methodological weakness and too much reliance on the gap-illing approach, and multiplicity of objectives failing to focus on main objective of reducing disparities. q

(E-mail :pravakarirst@gmail.com pooja_amrita@ymail.com)

24 YOJANA June 2013

DO yOu KNOW?What is carbon trading?

Carbon Trading refers to the buying and selling of the right to release carbon dioxide or greenhouse gases into the environment by various countries. The carbon trade across the world began in 1997 with the signing of Kyoto protocol in Japan by 180 countries. The Kyoto protocol called for 38 industrialised countries to reduce their greenhouse gas emission.

Growing envi ronmenta l pollution across the world has been a cause of concern to everyone. Rapid development and industrialisation have only added to the problem. Carbon is an element stored in fossil fuels such as coal and oil when these fuels are burnt, carbon dioxide is released.

Carbon trading is like any other market trading. Carbon has been given economic value allowing people, companies or nations to trade it. If a company purchases carbon, it gets the right to burn it. Similarly, the country selling it, gives up the right to burn it. The carbons value is based on the ability of the carbon owning

country to store it and prevent it from release into the atmosphere

What is Participatory Note?

Participatory Note (PN) is an instrument issued by registered Foreign Institutional Investor (FII) to investors abroad, who want to invest in Indian stock Markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI). Trading through PN is easy because these are like contract notes which are transferred through endorsement and delivery.

PN are said to constitute 15-20 percent of cumulative investments by FIIs. In 2007 SEBI had proposed curbs on PNs. This led to immediate reaction and the markets came cradling down. In view of this sharp reaction, the proposal was shelved.

PNs are most ly used by o v e r s e a s H i g h N e t w o r t h Individuals (HNIs), hedge funds and other foreign institutions. These instruments allow them to invest in Indian markets through registered. Foreign Institutional Investors. (FIIs). These save time and costs associated with direct registrations According to a news

agency report, SEBI data shows foreign investment into Indian markets through PNs rose to 1.64 lakh crore rupees (USD 30 billion) in February 2013. In January 2013 PN investment in Indian market was 1.62 lakh crore rupees. Investment into Indian shares through PN was Rs 1.77 lakh crore rupees in November 2012 and 1.75 lakh crore rupees in October 2012 on policy reform measures taken by the government and its initiative to address tax related issues.

The quantum of FII investment through PNs increased to six month high at 12.33 percent in February 2013 from 11.83 percent in previous month. This was the highest igure since August 2012.

Until recently PNs used to account for more than 50 percent of total FII investments but their share has fallen after SEBI tightened its disclosure and other regulations for such investment. Since 2009 PNs constitute 15-20 percent of FII holdings in India, while it used to be 25 to 40 percent in 2008. During 2007 PNs share was as high as 50 percent. q

(Compiled by Hasan Zia, Editor, Yojana, Urdu)

Young biologist wins Green Oscar for saving Arunachal hornbillsA young wildlife biologist who converted bird hunters into their saviours in remote forests of Arunachal Pradesh was awarded the 2013 Whitley Award, also known as Green Oscar, in London on Thursday. Aparajit Datta was among the eight conservationists from across the world to win the prestigious award and shared 2,95,000 pounds as the prize money. Datta leads a programme to conserve hornbills in the Indian Eastern Himalaya at the Nature Conservation Foundation (NCF), an NGO established in 1996 to promote science-based wildlife conservation in India, said a statement by the Whitley Fund for Nature.

Hornbills are prominent birds of Asian tropical forests and Arunachal is home to ive hornbill species. But their killing by locals for meat and habitat loss because of shifting cultivation had threatened their existence deep inside forests. Many tribals were not aware that due to their predominantly frugivorous diet, the brightly coloured birds with loud calls have always been considered important agents of seed dispersal in the tropical forest. A small and poor tribal group in Namdapha National Park, called Lisu, were hunting the birds and logging for their fuel needs.

YOJANA June 2013 27

private decision makers. Two groups in particular are critical to this effort: state and local governments, and real estate developers.

First, in the current policy climate, state and local governments are beginning to promote energy efficiency initiatives. Indias National Action Plan on Climate Change (2008) points to building eficiency measures as essential to carbon emission reduction. Several national missions that focus on scaling building efficiency have also been initiated, such as the National Mission on Sustainable Habitat and National Mission on Enhanced Energy Efficiency. Effective execution of these national and state level programs will be the key determinants of their success.

State and local governments are vital for setting standards and supporting market leaders to accelerate energy efficiency. States across India are recognizing the importance of taking steps in this direction, for instance, by advancing plans to make building energy codes operational. The Bureau of Energy Efficiency launched the Energy Conservation Building Code (ECBC) for India in 2007. The ECBC establishes minimum requirements for energy-eficient design and construction for buildings with a connected load of 100 kW/120 kVA or more and provides guidelines for building design, including the building envelope (walls , windows), lighting, heating, air-conditioning and electrical systems.States such as Andhra Pradesh, Gujarat, Haryana, Karnataka, Maharashtra, New Delhi, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal have all committed to advancing plans to make the ECBC operational in 2013 for new construction. Across the country,

the tremendous benefits to be gained from ECBC adoption are being recognized by these states, as seen in the following graphic. Clear frameworks such as the ECBC can provide a necessary baseline for measuring energy efficiency beneits and success at the state and country level.

Leadership by state and local governments is crucial to effectively overcome barriers and transform the building market to be cost-saving. Making the ECBC mandatory and implementing an effective compliance mechanism will ensure that all newly constructed energy-guzzling buildings meet at least a minimum level of eficiency in their energy use. Along with the adoption of the building energy code, an enabling environment for code implementation and compliance is equally important. This is particularly relevant for the India. State governments can create environments that are conducive to code compliance by following a number of best practices. For example, the ECBC can be adapted to the states local climate conditions, so that it is applicable

to the climactic conditions of the geography in which it is being implemented. States can also form local steering committees that oversee ECBC implementation and ensure that the code is incorporated into the regions local laws. Another key factor is creating a skilled workforce with the knowledge base needed to check for quality control and effective building energy code implementation. States can develop this human capital by training municipal officers and empanelling professionals such as architects and engineers on code technicalities. Universities, professional organizations and non-proit groups can assist in providing such training. Government agencies can also award developers with the most eficient building to drive market competition, and consider providing policy incentives to both developers and tenants or buyers who implement energy eficiency in new or retroitted construction. In all cases, having structures in place for monitoring energy use and code-implementation are key to the successful uptake of eficient construction by the community.

seeral states hae aoued plas to ake the ECBC operaioal y for all e oerial ostruio, iludig: Adhra Pradesh, Delhi, Gujarat, Haryaa, Karataka, Maharashtra, Orissa, Rajastha, Tail Nadu, Utar Pradesh, ad West Begal.

Haryana

Rajasthan

Gujarat

Maharashtra

Karnataka Tamil Nadu

Andhra Pradesh

Orissa

West Bengal

New Delhi

Uttar Pradesh

30 YOJANA June 2013

T IS expected that by 2030 about half of the Indian population will be residing in urban areas. This pace of urbanization is already

being accompanied by problems of water supply, sewage disposal, municipal waste, the lack of open landscaped spaces, air and water pollution, and public transport, along with others. Most of these environmental problems have their origin in unplanned development of cities leading to higher use of resources such as land and water. Many times, there is not even consensus as to which challenges are more important and need to be addressed. It is therefore necessary to have an understanding of Indias serious urban environmental challenges along with empirical evidence, to enable policymakers to examine them.

Leading urban environmental challenges India faces

Major environmental challenges in Indian cities as follows:1. Changes in land use/land cover:

As urban population increases, the demand of land for various urban activities also increases. Forests need to be cleared,

Indias urban environmental challenges: Land use, solid waste and sanitation

uRbaN ENVIRONMENT

Kala Seetharam Sridhar Surender Kumar

DISCuSSION

Each state and city needs to formulate its own sanitation strategy and their

respective city sanitation plan respectively in

overall conformity to the national

policy

grasslands ploughed or grazed, wetlands drained and croplands are encroached upon due to expanding cities. This is a challenge because it reduces green covers and increases the consumption of fossil fuels and GHGs emissions, and leads to increase in surface temperature

2. Sol id waste generat ion, collection and its management: This is a major challenge because a large amount of solid waste is left by the side of streets, to decay, which is a major source of health concerns. Further, there are no appropriate mechanisms to collect and dispose off the waste thus generated.

3. Poor sanitation: This is a challenge because there is still a large proportion of population which practices open defecation; hence this plays a role in the pollution of surface and groundwater sources.

Seriousness of the challenges

Changes in land use/land cover: There is some evidence that there is steady erosion in the

I

Kala Seetharam Sridhar is with the Public Affairs Centre, Bangalore and Surender Kumar with the Department of Business Economics, South Campus, University of Delhi

36 YOJANA June 2013

ESTERN GHATS, a s t h e n a m e implies, refers to the impregnable Ghats located at the western side

of India. It is the beautiful, critical and invaluable bounty of nature. It is believed that Western Ghats is roughly 500-700 lakh years old i.e older than the Great Himalaya. It is the habitat and biological hotspot of 5000 lora, 16 never ever seen endemic birds, 179 omnivorous species and 191 pure water ishes. It is 1600 km in length and 900 meters in height and stretches from Thapthi river of Gujarat to Kanyakumari of TamilNadu. It is pervasive throughout 6 states of India viz Gujarat, Maharashtra, Goa, Karnataka, Tamil Nadu and Kerala. The toppest peak of Western Ghats is Anamudi found in the Idukki District of Kerala. The major seven clusters of Western Ghats are Agasthyamala, Periyar, Anamala, Nilagiri, Thalakkaveri, Kudhramukh and Sahyadri. The direct and indirect needs of around thirty crore people of these six states for drinking water and irrigation are invariably met by Western Ghats.

Western Ghats and Wild Life Preservation

WIlDlIfE aND ECOlOGy

P K Sujathan

RECOMMENDaTION

Above all, Social forestry with a stress on exploitation of

renewable forest resources may also

be encouraged. Earnest efforts

should also be taken to minimise the

fragmentation of wild life habitat

Taking in to account the ecological mainstay and traditional signiicance, Western Ghats have been added to the enviable list of UNESCOs world heritage sites on July 1, 2012 at a meeting in the Russian city of St. Petersburg. Being a treasure trove of biodiversity, the Ghats irrevocably needs tender treatment and unfailing protection. Thirty nine sites of the Ghats have been selected as heritage sites by the World Heritage Committee. The Committee viewed that the Ghats represents geomorphic features of immense importance with unique biophysical and ecological processes.

However, it is dolesome to note that the Ghats is subjected to rigorous exploitation of mankind. The ecological imbalance and the irregular rhythm of nature is mainly attributed to the unfettered axing of trees and thus paving the way for the desertiication of the zone. The concomitant occurrence of lood and drought, soil erosion, landmining etc are the deleterious fall-outs of the deforestation drive of mankind. The Red Data published in 2012 signal that the lora and

W

The author is Research Oficer, District Planning Ofice, Civil Station Palakkad, Kerala

What I would like to say is scripted by God in trees, lowers and clouds. So, I will not desist from planting trees for fear that the universe is nearing its end.

-Martin Luther King

YOJANA June 2013 37

fauna of the Ghats is increasingly depleted and decimated over the years. Silent Valley, one of the must see destinations in a mans life also belongs to the Ghats and is on the verge of premature death. The major threats area. Unscientif ic methods of

ishing such as electro ishing, d y n a m i t i n g , i n d u s t r i a l efluents, introduction of exotic species (the food preference of exotic species is similar to that of endemic species and will adversely affect the progeny of endemic species.)

b. I l legal mining is found rampant especially in Goa and Karnataka. Mining activities badly necessitate enormous quantum of water which in turn causes siphoning off water into mining pits. Naturally, there is dearth of water for farming and drinking.

c. Indiscriminate sand mining and the proiteering of sand maia also tell upon the health of the Ghats.

d. The large scale thermal plants such as cement, iron and steel in the states of the Ghats heighten the temperature of

nearby regions by dissolving toxic chemicals from air. In addition, thermal power plants emit Fly ash containing lead and mercury which is deposited in river and thereby turn det r imental to the reproductive cycle of ishes.

e. N o t s u r p r i s i n g l y, t h e unprecedented increase in farm houses in the hill become more consumers of energy as construction fervor is on the upbeat in the Ghats region.

f. As a result of the aforesaid nefarious activities, sacred groves are malevolently weeded out and thus displacing and dispossessing the tribals.

Western Ghats Development Programme

Having under s tood tha t preservation of the Ghats and its wildlife is the need of the hour, the Govt of India, following the mandate of the National Development Council, promulgated the execution of the Western Ghats Development Programme in the Fifth FYP (1974-79). Although, at the outset, emphasis on and priority for was accorded to the expansion

of economic activities, there was a paradigm shift from the Nineth FYP onwards wherein watershed based development approach became the watchword. The key objectives, therefore includeda. To make use of land and water

in the vicinity in a judicious manner so as to tide over soil erosion, drought etc and thereby improve availability of water, food, fodder and fuel.

b. To execute in letter and spirit watershed based development programmes with the help of watershed society.

c. To select a vibrant Programme Implementing Agency to prioritise the implementation of locally felt needs.

d. To optimize the use of natural resources and assure the safety of forest.

e. To establish proper linkage between watershed committee and Financial Institutions.

f. To assure equality and social justice for the destitute and women.

g. To foster watershed based research programmes.

h. To bring abo