Indian Industry has started appreciating the concept of sustainable development. More and more companies are migrating away from the “business as usual” approach; as these companies strive to achieve long-term sustainability, they are realising the need to integrate social and environmental issues into business decisions. Confederation of Indian Industry (CII) has always been voicing its concern for the growth of Indian industry with due consideration to environmental issues and sustainable solutions. This issue of Policy Watch focuses on various challenges faced by the Indian industry with regard to environmental regulatory compliance and has outlined some specific recommendations to overcome those challenges.

1. 1policy watch
this IssueInside
Message From the
Director General........... 1
Chandrajit Banerjee,
Director General, CII
Policy Barometer.......... 9
Industry Voices........... 12
CEO Speak............................................................................................2
August 2013, Volume 2, Issue 4
Policy
T
he next decade is likely
to see two facets of
development gaining
prominence. On the one hand, industrial
growth will play a vital role in resolving
some of the major challenges faced by
societies–supporting economic growth,
meeting basic needs, lifting millions of
people out of poverty, facilitating mobility
and social interaction. On the other,
environmental pressures in the form of
changing climatic conditions, scarcity of
natural resources and so on are likely to
increase, turning the spotlight firmly on
the quest for sustainability.
In spite of a wide range of environmental
regulations and policies in place, India still
faces many environmental issues such as
resource depletion (water, mineral, land,
forest, biodiversity etc.), environmental
degradation, loss of resilience in ecosystems
and livelihood security for the poor. The
Economic Survey 2012 by the Government
of India acknowledges that India ranks 125
out of 132 countries in the Environmental
Performance Index (EPI). As the country’s
population and economy continue to grow,
so do the challenges.
All human activities including business
cycles derive resources from the natural
environment in one way or the other,
and therefore, it is in the interest of all
stakeholders that the quality of the natural
environment and biodiversity is maintained
and conserved. The key requirement is
continued adoption of technology and
scientific management of resources,
continued increase in productivity in every
economic sector, entrepreneurial innovation
and economic expansion.
To address the environmental challenges,
the three key stakeholders: civil society,
Government and industry need to play
their own unique role. The first guides
society and cautions us that the planet
is endangered. The second creates an
enabling environment for implementing
solutions through appropriate policy
interventions. But the ultimate responsibility
of devising and actioning the solutions
rests with industry.
We need to consider the growth
requirements of our country vis-à-vis the
challenges of sustainability and therefore,
the real challenge is of accelerating
economic growth while placing equal
importance on regenerating – and not
just preserving – the environment. The
Confederation of Indian Industry (CII)
has always been voicing its concern for
the growth of Indian industry with due
consideration to environmental issues and
sustainable solutions. It was during the
first Rio Summit in 1992 that CII initiated
sustainability services for its members. At
that time, CII had to develop a business
case for environment management as
then industry could not see value in being
environmentally conscious. Twenty years
hence, CII takes pride in the efforts of
our industry members to create solutions
that help India and the rest of the world
not only reduce the environmental impact
of human activity, but also regenerate
environment.
CII has been proactively working on
these issues to find sustainable solutions
through the involvement of all relevant
stakeholders. It has a national level
Environment Committee under the
chairmanship of Mr Arun Bharat Ram,
Past President, CII and Chairman, SRF
Limited, with membership from diverse
industrial sectors. The Committee, along
with various stakeholders, is spearheading
policy advocacy to create an enabling
ecosystem for an effective environmental
regulatory regime in the country. CII
is actively organizing various capacity
building programmes for its industry
members to build awareness on the latest
amendments and trends in environmental
legislations, encouraging them to adopt
best available practices and technologies
for the protection of the environment.
In this issue of Policy Watch, we focus on
the various challenges Indian industry faces
with regard to environmental regulatory
compliance, along with CII’s suggestions
to overcome those challenges.
I hope continuous time-bound efforts and
ongoing reforms will help India tackle
major environmental issues in a planned
and systematic way. n
Chandrajit Banerjee
Director General
Confederation of Indian Industry
Arun Bharat Ram, Past President, CII;
Chairman, CII National Committee on
Environment and Chairman, SRF Limited
Pradeep Dhobale, Co-Chairman, CII National
Committee on Environment and Executive
Director, ITC Limited
Dr Nik Senapati, Co-Chairman, CII National
Committee on Mining and Managing Director,
Rio Tinto India Private Limited
Kamal Meattle, Chief Executive Officer,
Paharpur Business Centre
Focus: Ensuring Environment Protection For Sustainable Economic Growth

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CEOSpeak
With growing awareness amongst
general public about conservation and
protection of the environment and an
active judiciary, business organizations
need to consider environmental
protection while formulating their
long-term business strategies. What
are your views in this regard?
For long-term sustainability of business
processes, we need to ensure sustainability
of the natural environment. Indian businesses
are increasingly recognizing their impact and
dependency on the natural environment.
Besides providing key inputs for business
processes, the natural environment also
receives unused resources and energy as
byproducts. To ensure a sustainable supply
of natural resources, businesses are required
to take care of their impact and dependency
on the natural environment and adopt
efficient processes, thereby reducing wastage
of precious natural resources.
Globally, there is a new breed of investors
known as responsible investors. They
specifically look at long-term sustainability
parameters of a business before investing
in it. These parameters are broadly classified
in the domains of environmental, social and
corporate governance.As businesses have an
ultimate objective of increasing shareholders'
value, the concept of long-term sustainability
essentially fits into the framework of valuation
of a firm to its shareholders.
On the regulatory front, we have seen a wide
range of regulations from the Government
for environment protection and conservation.
The active role of judiciary, especially the
National Green Tribunal (NGT), is catalyzing
adoption of the concept of environmental
protection and conservation by the industry.
But we must also ensure that enough
safeguards are built in the system so as to
avoid creating barriers to the growth and
development of the industry.
Despite the wide range of
environmental regulations notified
by the Government of India, we have
not been able to achieve the desired
level of environmental quality. What
are your views on the efficacy of
the current regime of environmental
regulations in India?
After independence, our economy has grown
in an appreciable manner. However, we need
to analyse whether the existing command and
control regime is able to support the next level
of environmental regulation or do we need
an innovative approach for prevention and
control of pollution considering the carrying
capacity of the environment to maintain
long-term sustainability.
With increasing pollution levels in air and
water across all the tiers of cities, the current
regime of the environmental regulatory
framework is being criticized on the grounds
that it is unduly rigid, cumbersome, and
costly; fails to accommodate and stimulate
innovation in resource-efficient means
of pollution prevention; fails to prioritize
risk management wisely; is patchwork in
character, focuses in an uncoordinated fashion
on different environmental problems in
different environmental media often ignoring
functional and ecosystem interdependencies
and relies on a remote centralized system
that lacks adequate accountability. While
acknowledging its past accomplishments, the
existing system appears to be reaching its
inherent limits and seems no longer capable
of ensuring sustainable environmental
protection at tolerable social cost.
The CII National Environment Committee is
actively working on providing inputs to the
Ministry of Environment and Forests (MoEF)
to enhance the efficacy of the current
environmental regulations. It is specifically
looking into the issue of the next generation
of regulatory standards. Future regulations
can be designed to be more effective
Business for Environment
Arun Bharat Ram
Past President, CII; Chairman, CII National
Committee on Environment and
Chairman, SRF Limited

3. 3policy watch
CEOSpeak
and SMART by including certain market-
based instruments. These could go beyond
compliance and provide inherent benefits
to those who would do ’extra’ to curtail
their emissions.
Some of the major issues with respect to
the current command and control regime
are as follows:
a) Need for Market-based Regulatory
Instruments:
Our current environmental regulations
come under criminal laws which imply
a ’prohibit and punish’ regime. Under
criminal law, the companies are either
subject to compliance or non-compliance
and not to the extent of compliance with
the standards, thereby resulting in the
absence of any incentive for business
organizations to go beyond compliance.
The command and control regime
stresses static economic efficiency. It
ignores dynamic efficiency gains resulting
from the adoption of environmentally
sound technologies/clean technologies
which would result in saving material,
energy, lowering pollution, improving
product quality and greater market
access etc. There is a need to shift
from substantive law to reflexive law.
Reflexive law aims to create incentives
and procedures to induce people to
continually assess their actions and
adjust them to society’s goals.
b) Need for Institutional Strengthening:
The State Pollution Control Boards
(SPCBs) have the prime responsibility
of implementing and monitoring the
environmental regulations in their
respective states. Very often, it has
been highlighted that the SPCBs don’t
have adequate technical manpower as
well as financial resources to undertake
compliance monitoring in an effective
manner.
c) Ineffective Monitoring/Verification of
Compliance:
In the country at large, due to the
absence of online monitoring of point
sources of pollution, neither industry
nor pollution control boards are able to
monitor compliance effectively. Despite
the best efforts by the industry, the spot/
grab sampling provides only a snapshot
of the compliance at a particular time
but doesn’t provide overall compliance,
leading to ambiguity in reporting.
d) Technological Barriers:
On account of an increase in the quantity
of waste as well as variation in its
quality, there is a need for upgradation
of technology, depending upon changes
in the product or the process. More
emphasis should be given on process
technologies rather than end-of-pipe
treatment technologies.
e) Lack of Directional Clarity:
Industry usually takes capital investment
decisions keeping in view the long-term
policy environment. Currently, since there
is no long-term road map for the review
of regulatory standards, the industry is
finding it difficult to take such decisions.
Further, it is also adding risk complexion
to the projects in hand.
India is the President of Conference
of Parties (CoP) to the Convention on
Biological Diversity (CBD) for a two
year term till CoP-12, to be held in
October 2014. What are the enabling
factors for businesses to actively engage
with the Government for biodiversity
conservation?
The industry is an important stakeholder in
biodiversity and how companies manage their
impact and dependencies on biodiversity is
increasingly seen as relevant to their bottom-
line performance. CoP-11 vide its decision
XI/7 on Business and Biodiversity has
inter alia called upon businesses to adopt
practices and strategies that contribute to
achieving the goals and objectives of the
CBD and its strategic plan.
The MoEF has a Biodiversity Conservation
and Rural Livelihood Improvement Project
(BCRLIP) which aims at conserving biodiversity
in selected landscapes, including wildlife
protected areas/critical conservation areas
while improving rural livelihoods through
participatory approaches. The development
of Joint Forest Management (JFM) and eco-
development in some states are models of
new approaches to provide benefits to both
conservation and local communities.
The probable role of industry in such
initiatives needs to be incorporated,
especially for business organizations using
ecosystem services in one or the other
operation in the value chain.
On a voluntary basis, there have been
many initiatives by Indian industry for the
conservation and protection of biodiversity
but the enabling factors for the businesses to
actively take it to the next level are:
i) Policy Support for Public Private
Partnership Model: Industry needs
a clear policy by the Government
of India for adoption of a Public
Private Partnership (PPP) model
for conservation and protection
of biodiversity. We are seeing
an increasing number of good
examples of partnerships that cross
the boundaries between the public,
private and non-Government spheres
to bridge public financing gaps for
various types of projects. Why not
biodiversity conservation projects?
This will help to ensure long-term
sustainability of voluntary initiatives
of the industry in biodiversity
conservation and protection. Further,
it will also encourage industry to
locate some of its operations near the
sources of raw material and employ
local people, thereby providing them
livelihood.
ii) Tools forValuation of Biodiversity and
Ecosystem Services: An appropriate
tool for assessing the valuation of
ecosystem services to the businesses
needs to be brought out by the MoEF.
There are certain tools developed by
international organizations working
in this domain but a customized tool
as per the requirement of Indian
conditions needs to be prepared.
iii) Clarity on the First Use of Bioresources
Needs to be Spelt Out Clearly:
Globally more than 1.3 billion people
depend on biodiversity and on basic
ecosystem goods and services for
their livelihood. Biodiversity values
are implicit in general rather than
being explicit. The industry needs
clarity on the rights of first use of
bioresources so that biodiversity
conservation efforts can be planned
accordingly. n

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CEOSpeak
In its Sustainability Report 2012, ITC
stated that it is a Water Positive,
Carbon Positive and Waste Recycling
Positive company. What are the
policy bottlenecks faced by ITC while
planning and executing environment
friendly projects?
In line with the Government of India’s
National Action Plan on Climate Change
(NAPCC), ITC has adopted strategies to
address climate change related impact
and accordingly developed mitigation and
adaption plans. Our approach has been
to integrate these plans with our business
strategies.
I would not say that there have been policy
bottlenecks in executing these programmes.
However, the potential to which these
initiatives can be scaled up can be enhanced
substantially with certain policy changes.Take
the case of the afforestation initiative.
There is a need to introduce appropriate
amendments to the Forest (Conservation)Act,
1980, and related rules to permit industry to
use degraded forest land for afforestation
linked to the end-use of such wood.
An enabling policy framework that
encourages public private partnerships (PPP)
for the development of degraded forestlands
would serve the multiple objectives of
Pradeep Dhobale
Co-Chairman, CII National Committee
on Environment and
Executive Director, ITC Limited
Achieving Sustainability Through
An Enabling Policy Framework
enhancing the competitiveness of the Indian
paper and paperboard industry, reducing
import dependence, creating sustainable
livelihoods in rural India and contributing
to the national objective of enhancing the
country’s green cover.
The multi-stakeholder partnership model
proposed some years ago by the Ministry
of Environment and Forests (MoEF) needs
to be reactivated. Involvement of industry in
Joint Forest Management (JFM) as a partner
is another area which can help scale up
afforestation.
Agri-businesses can play a crucial role
in soil and moisture conservation and
the promotion of sustainable agricultural
practices. However, there is no Government
mechanism which recognizes that businesses
can play an important role in these areas,
both to meet national priorities and ensure
sustainability of agri-supply chains.
A multi-stakeholder partnership is strongly
recommended to implement Government
programmes on watershed development
and increase the resilience of agriculture
to global warming and extreme climate
episodes. These partnerships can unleash
synergies for more efficient and large scale
implementation of such programmes because
it will bring together (a) the scale and
resources of the Government programmes,
(b) the mobilizing skills of the NGOs and
(c) the project and financial management
capabilities of the private sector.
What are the key measures that the
Government needs to take to ensure
effective participation of the business
community in the conservation and
protection of the environment?
In my opinion, the Government needs to
move away from a prescriptive and mandating
approach. Industry feels that the legal system
of our country needs to give a helping hand
to the organizations doing more than meeting
their regulatory compliance requirement.
Conservation and protection of environment
can be built into business models as
demonstrated by ITC but there is a need
to incentivize such an approach. Under
the present legal system, we can’t have
economic instruments in place which have
a specific focus on the extent of compliance.
The National Environment Policy, 2006,
notes that ‘although criminal sanctions, if
successful, may create a deterrent impact, in
reality they are rarely fruitful for a number
of reasons’. Civil law offers flexibility and
its sanctions can be more effectively tailored
to particular situations i.e. the concept of
carrying capacity of the environment can be
take into account under civil law.
We need to look at innovative and inclusive
approaches towards conservation and
protection of the environment. Can we

5. 5policy watch
CEOSpeak
Achieving a Net Positive Impact
evolve a green rating for business entities
and then incentivize top rated companies in
terms of faster project clearances? Can we
evolve REC (Renewable Energy Certificate)
and PAT (Perform, Achieve and Trade) type
mechanisms for water consumption? Or
even for discharge parameters related to
effluents and emission?
Another way of incentivizing industry is to
provide additional benefits like entitlement
for import of raw materials at a 50 per cent
concessional rate of duty, full exemption
from excise and VAT for products made with
specified clean technology and accelerated
tax depreciation at 150 per cent of the
normal depreciation rates under income tax
laws for investments in environment-friendly
technology. n
There have always been concerns
about the operational impact of
the mining industry on the natural
environment and biodiversity. How
does Rio Tinto see the connect
between biodiversity and sustainable
mining operations?
Rio Tinto owns and manages more than
110 operations around the world and the
concept of sustainable development is
integrated into all aspects of our business
through our corporate and operational
policies, standards, strategies, programmes
and performance indicators. Our aim is to
have a net positive effect on biodiversity,
which means minimizing the impact of our
business and contributing to biodiversity
conservation through sustainable mining
operations.
Our approach to driving environmental
performance across the group is pro-active,
risk management based and leadership
driven. This ensures that a region ultimately
benefits from our presence. However, this
does not mean we can be all things to all
people, and before we begin work on any
project, we carefully research expectations
Dr Nik Senapati
Co-Chairman, CII National Committee on
Mining and Managing Director,
Rio Tinto India Private Limited
that the communities have as well as the
areas of concern for them. While we don’t
always have the skills internally to address
these issues, we do address them. One
way we overcome this lack of internal
skills to address these issues is by working
in partnership with respected community,
environmental and non-Governmental
organizations. Rio Tinto has about 20 such
global partnerships.
Rio Tinto is committed to the conservation
of threatened and endemic species and high
priority conservation areas and supports
local, national and global conservation
initiatives. By way of example, whilst Rio
Tinto’s developing Bunder diamond project
in Madhya Pradesh is still in pre-feasibility
stage and some years away from getting to
production, our commitment to sustainable
development began in 2004 on day one of
the project.
Whilst the Madhya Pradesh region presents
many social, economic and environmental
challenges, enormous research is being
done with the help of the State Forest
Research Institute to assess the impact of the
developing project on the local environment.
This has led to initiatives such as scope
for positive change. For example, we work
closely with the state forest department
for annual plantation drives, large scale
eradication of the invasive plant (lantana)
and forest regeneration programmes.
How do mining companies balance
their commercial considerations with
environmental considerations?
Mining companies with a true commitment
to sustainable development have figured
out that local land, biodiversity and social
development issues are closely intertwined

6. 6 policy watch
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and that gains are possible on a number
of fronts when companies take the time to
understand the environment in which they
operate and work in true partnership with
local communities and organizations to
address local environmental issues.
In other words, no blundering in, in big boots
and telling communities what’s good for
them.This type of work needs to be built on
regular conversations, careful observations
and steady relationship building.
Balancing environmental considerations with
commercial considerations is a given for Rio
Tinto. The company has developed some
very successful strategies for engaging with
local communities to develop conservation
and biodiversity programmes that will
protect the needs and interests of these
communities in the long term. The Bunder
project provides many examples such as
working with the local Government to
supply water to the region, cattle breeding
initiatives, vegetable cooperatives, harvesting
rain water, developing local plant nurseries
and baseline flora and fauna studies.
The gratifying result is that well-considered
environmental initiatives provide the
opportunity for real social and economic
gains. The most ideal outcome is to leave
behind a community that is much stronger
and more resilient than when the company
first arrived. As someone who has watched
this process at work, I have to say it’s a
very gratifying business result.
The mining industry provides key
inputs to other industrial sectors of
an economy. What are the key policy
issues faced by this industry during
the appraisal of mining projects for
environmental clearance?
India is a very mineral rich country with
great potential for mining to contribute
significantly to the socio-economic
development of the country. A large part
of the mineral resources lie in forest and
community lands. The policies currently in
place to enable an investor to explore these
resources and develop them are plagued by
severe procedural delays and uncertainty.
As an example, the time period to go
from a reconnaissance permit to applying
for a mining lease could be as much as
10 years or longer. The environmental
and forest department clearances are
very cumbersome and time consuming.
Acquisition of land, especially forest land,
is also a big challenge. These aspects are
not friendly to international investors who
might prefer to invest in more friendly
jurisdictions even though the potential in
India is huge.
What are your views on the
Environmental Impact Assessment
approvals process?
Environmental Impact Assessment (EIA)
appraisal needs to be understood as a tool
for decision making rather than something
required to meet legal obligations. It helps
to identify the environmental, social and
economic impact of a project prior to
decision making. Early stage assessment with
a wider perspective is important to predict
environmental impact so that this can be
mitigated by proper project planning. It is
important to address livelihood issues and
biodiversity conservation through community
engagement. Properly conducted EIA also
reduces conflicts by promoting community
participation, informs decision makers and
helps lay the base for an environmentally
sound project. Rio Tinto is working to
enhance biodiversity outcomes through
consultation, constructive relationships and
partnerships with key stakeholders. n

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The creation of infrastructure is one
of the prerequisites for the expansion
of a nation’s economy. In the current
economic scenario, to bring the
industry back on the growth path,
infrastructure development is one of
the priority areas for the Government.
In your opinion, what should be the
key initiatives towards creation of
sustainable infrastructure?
Conventional buildings consume 40 per cent
of the world’s resources, including 12 per
cent of its water and up to 40 per cent
of the energy we use. By the year 2050,
residential, institutional and commercial
buildings are expected to consume as much
as 38 per cent of global energy production
and release about 3,800 megatons of
carbon in the atmosphere. The ecological
impact of urbanization has become a
major justification for a new development
paradigm: sustainable green cities.
Sustainable architecture is the only way
forward. Sustainable or the ‘Green Building
Movement’ is gaining momentum as it
provides benefits that conventional buildings
do not. These benefits include energy and
Moving Towards Green Infrastructure
Kamal Meattle
Chief Executive Officer
Paharpur Business Centre
water savings, waste reduction, efficient
resource management, improved indoor
environment, greater employee productivity,
reduced employee health costs and lower
operations and maintenance costs which are
instrumental in reducing the environmental
impact of buildings. Green building activities
result in the reduction of operating costs
by 25-30 per cent. Green projects offer a
proven Return on Investment (ROI) of up
to 44 per cent. The green certification also
helps enhance asset value.
However, sustainable architecture is not
the sole subset of green infrastructure.
Emphasis should also be laid on the
creation of efficient public transport with
connectivity up to the residential pockets
of cities. At present, more than 1,200
cars get added to the roads of Delhi on
a daily basis resulting in traffic jams in
almost every arterial road network. While
running or spending idle time in the traffic,
motor vehicles add air pollutants like
Particulate Matter, Respirable Particulate
Matter, Carbon Dioxide (CO2
), Carbon
Monoxide (CO) etc to the environment. To
build the cities of future, the Government
needs to carefully plan the public transport
system.
The metro train is the fastest mode of
transportation in cities. It is a convenient
and economical way to travel. However, since
it is not very well connected with all the
residential areas, a majority of commuters are
compelled to use their own cars, leading to
road congestion and increase in air pollution.
Last-mile connectivity is missing and it is
suggested that the concept of ‘door-to-door
public transport service’ should be brought
into effect. Last-mile connectivity will help
in reducing the number of vehicles that run
on Delhi roads, hence bringing down the
level of pollution caused by them.
Sustainable infrastructure and connectivity
around it can play a key role in catalyzing
or retarding environmental challenges.
Sustainable development represents a
balance between the goals of environmental
protection and better infrastructure and
economic development, leading to human
progress.
‘Green‘ is a new buzzword in the
infrastructure sector, with new projects
being planned as green projects
keeping in mind the energy and water
requirements of the buildings. What
should be the policy direction to
encourage such environment- friendly
projects?
A study reveals that two-thirds of India is
yet to be built and that will happen in the
next 20 years. The construction industry in

8. CEOSpeak
8 policy watch
India is growing at a rate of 9.2 per cent
as against the world’s average count of 5.5
per cent. Sixty per cent of human population
will be living in cities in the next 15 years
so we will need over 10 million new
homes each year. In urban areas there is a
growing preference for working and living
in air-conditioned spaces; thus, the need for
more energy, water and waste management
in buildings of all sorts. I would, therefore,
like to suggest the following:
• Promotion of Energy Efficiency: As
per some estimates, if energy efficient
techniques are applied to just 10
per cent of the buildings constructed
in cities every year, India can expect
enough savings to light 20 million
rural households. The Government of
India should make the Green Standards
and Energy Conservation Building Code
(ECBC) mandatory for every project
proposed to it.
• Retrofitting in the Existing Buildings
Should be Encouraged: It does not
matter how much area one puts into
use for greenery or how many energy
efficient technologies one uses if it
contributes to an ever increasing demand
on the infrastructure sector in terms of
energy and water, then the purpose of
going green is defeated. Incorporation
of least important features, which add
to the overall impact of the building in
terms of demand for energy and water
should be avoided in the design.
• Promote Rainwater Harvesting:
Rainwater harvesting should also be one
of the obligatory clauses in the policy.
The National Capital Territory (NCT) of
Delhi annually receives on an average
611 mm of rainfall i.e 61,100 liters of
water/ 100 sqm. Out of this, 36,660 liters
of water is available for rooftop rainfall
water harvesting.An analysis done based
on the rainfall availability and demand
supply gap shows that even 50 per cent
of the rainwater harvested could help in
bridging the demand supply gap. Rain
water is better for landscape plants and
gardens as it is not chlorinated. It also
helps in increasing the water table.
• Provide Incentives to Green
Projects: Benefits in terms of tax
rebates / breaks, increased Floor Area
Ratio (FAR) etc should be given to those
residential and commercial buildings that
follow the green standards/guidelines by
Indian Green Building Council/Energy
Conservation Building Code.
Most of the commercial buildings have
a High Volume Air Conditioner (HVAC)
system i.e. they have artificial air
circulation. There is scientific evidence
of the deterioration of employee
efficiency in case the indoor air quality
is not maintained properly. What are
your suggestions on the policy front
to address such indoor air quality
challenges?
Indoor air pollution is the second highest
killer in India. Indoor air may be up to
10 times more polluted than ambient air
depending on the internal housekeeping
standards of the buildings. This may lead
to eye irritation, respiratory symptoms,
lung impairment, asthma, headache and
more. Considering the fact that indoor
air pollution affects employee health and
productivity, the only solution in sight
seems to be the ’natural way’ of combating
these challenges.
Plants like Areca Palm, Mother-in-Law’s
Tongue and the Money Plant combat
indoor pollutants and drastically improve
the Indoor Air Quality (IAQ). They are easily
available and maintainable houseplants.
Instead of working just as beautifiers, plants
can do wonders in terms of bringing down
power costs. It is suggested that growing
the right kind of toxin removing plants
should be encouraged as it is one of the
easiest way to curb indoor air pollution.
Paharpur Business Centre (PBC) has hands-
on experience in this. We grow our own
fresh air with the help of more than 1,200
toxin removing plants that are grown
indoors. As compared to other buildings,
a reduction of up to 45 per cent of CO2
,
93 per cent of Particulate Matter, 99.99
per cent of Volatile Organic Compounds
(VOC) and fungus count has been observed.
Such IAQ numbers have been practically
achieved in a 5,000 m2
building of PBC
in Nehru Place - one of the more polluted
areas of Delhi.
Although state factories rules specified
certain limits for some of the pollutants,
it does not take into account all the
parameters, especially for buildings with the
HVAC system.The Government may consider
framing a separate policy to regulate the
IAQ. Use of pollutant-free indoor materials
like low VOC paints should be encouraged
through proper policy initiatives.
The Government may consider to mandate
monitoring of IAQ in commercial buildings.
Regular inspection and audits for IAQ and
materials used inside the buildings will help
in enhancing the IAQ.
However, the most important thing is
to generate awareness amongst project
developers and the occupants of buildings
on the benefits of good indoor air quality
and the hazards caused due to indoor air
pollution. n

9. 9policy watch
Policy Barometer
Need For A More Proactive and
Pollution Abatement Centric Approach
India is the seventh largest country in the
world by geographical area and has a
population of over 1.1 billion people, up to
65 per cent of which is under the age of
30. This gives it a demographic dividend in
terms of a young work force and together
with the improving quality of life of its
middle class, makes the country a hotspot
both from an investment point of view as
well as its market potential. However, there
is a need to look at development from
the lens of sustainability as well since it is
important to ensure availability of resources
and opportunities for future generations.
The historical conference on Human
Environment, held in Stockholm from 5th
June to 16th June 1972, was the first
global recognition that the environment
was endangered and that Governments
and industry would have to collectively put
in effort to protect the environment. After
the Stockholm conference, India provided
constitutional sanction to environmental
concerns through the 42nd
Amendment1
in the Constitution of India. Specific
legislations on environmental matters
started with the Water (Prevention and
Control of Pollution) Act of 1974. It was
followed by a parallel enactment called the
Air (Prevention and Control of Pollution) Act
of 1981 and an umbrella legislation called
the Environment (Protection) Act of 1986.
After that, a wide range of environmental
regulations have been notified to regulate
various types of emissions, industrial
discharges and management of waste,
with the recent E-waste (Management and
Handling) Rules, 2011.
The effective implementation of these
environmental regulations require processes,
procedures and institutions at the Centre,
State and District levels with the capacity
to plan, implement, monitor and enforce
compliance, as it is primarily a Government-
centered command and control regime.
Despite a strong policy and institutional
framework and some successes,
environmental degradation has not been
arrested on a large scale. Deforestation,
soil erosion, water pollution and land
degradation continue to worsen and are
hindering economic development in rural
India while rapid industrialization and
urbanization in India’s booming metropolises
are straining the limits of municipal services
and causing serious environmental problems.
However, there is a paucity of evidence about
the efficacy of environmental regulation in
India. This is quite evident from India’s poor
environmental performance.According to the
Environmental Performance Index by the
United Nations, currently India ranks 125 out
of 132 nations and it is also the 3rd
largest
emitter of carbon dioxide in the world.
After India gained independence in 1947,
the country’s economy has grown in an
appreciable manner. However, what needs
to be analysed is whether the existing
command and control regime is able to
1 Article 48A of the Directive Principles of the State Policy directs the State to endeavour to protect and improve the environment and to safeguard the forests and
wildlife of the country. Further, Article 51A(g) of the Constitution states that it shall be the duty of every citizen of India to protect and improve the national environment
including forests, lakes, rivers and wildlife and to have compassion for living creatures.

10. 10 policy watch
Policy Barometer
support the next level of environmental
regulation or an innovative approach for
pollution prevention and control, considering
the carrying capacity of the environment
and hence maintaining the long term
sustainability, is needed.
This requires moving beyond the conventional
’do no harm’ approach at the project level to
a more proactive ’do good’ approach at both
the project and national levels. However,
India’s current environmental regulations
come under criminal laws which imply a
’prohibit and punish’ regime.
The Ministry of Environment and Forests
(MoEF) is currently running a pilot project-
Emissions Trading Scheme - launched in
March 2011, which is based on a self-
regulatory mechanism. It is an innovative
instrument for environmental regulation,
where the Central Pollution Control
Board (CPCB), the State Pollution Control
Boards (SPCBs) of Gujarat, Tamil Nadu
and Maharashtra, outside experts and a
team from the Massachusetts Institute of
Technology (MIT) and The Abdul Latif Jameel
Poverty Action Lab (J-PAL) are participating
to run this pilot project.
Emissions trading schemes have great
potential to lower pollution while minimizing
costs for industries. The benefits of such
schemes come from two sources.
On the industry side, units are able to
choose for themselves the cheapest way to
reduce pollution. In comparison, traditional
command and control regulations do not
allow for differences across industries.
Mandating the same standard everywhere
will generally miss the best opportunities
for abatement.
On the regulatory side, an emissions trading
scheme, once established, will provide a
self regulating system that makes pollution
control more efficient. In the longer run, the
reduced costs of compliance can also make
it easier to introduce new regulations that
increase environmental quality. The role of
regulator will change to becoming a facilitator
of the regulatory regime. Seen from the
lens of environmental sustainability, it takes
care of the natural carrying capacity of the
environment and hence helps in bringing
down the overall level of pollutants.
But the irony is that under the present
framework of environmental regulations, it
is not possible to have economic instruments
in place which have a specific focus on
the extent of compliance. The National
Environment Policy, 2006, notes that “the
present environmental redressal mechanism
is predominantly based on doctrines of
criminal liability, which have not proved
sufficiently effective, and need to be
supplemented.” On the other hand, civil
law offers flexibility, and its sanctions can
be more effectively tailored to particular
situations i.e. the concept of carrying
capacity of the environment can be taken
into account under civil law.
Therefore, there is a need to bring in
economic instruments to support the existing
environmental regulatory framework.
The various Economic Instruments (EIs)
for the regulation of environmental
pollutants are fiscal incentives, capital/
interest subsidies, tax exemption, eco
labelling, bank guarantees etc.
Another major policy challenge is the
streamlining of the Environment and Forest
Clearance process in the country. Some of
the major issues and CII’s suggestions are
listed below:
1. Delay in Decision Making on
Project Proposals for Environment
and Forest Clearances:
A time-frame for completion of each
stage of the clearance process has
been provided in the 2006 Notification.
However, it has been observed that
sanctity of deadlines is not maintained.
It therefore defeats the purpose
of defining timelines in the 2006
notification, which weren’t there earlier.
As a result, projects continue to suffer
due to delays both at the MoEF level
as well as the state level.
Another critical issue (as seen in UP
and Punjab) is that it takes inordinate
delays in re-constituting the state level
Environmental Impact Assessment
Authorities (SEIAA) after the term
gets over. In the meantime, all project
applications remain stagnant at the state
level (such as in UP) or are transferred
to MoEF, resulting in project piles ups
and delays.
Therefore, the specified timelines should
be met while the project appraisal
process under Environmental Impact
Assessment (EIA) Notification is on.
Also, the constitution/reconstitution
of the state level Expert Appraisal
Committees needs be done in a time
bound manner.
2. Need to Be Pollution Abatement
Centric and Not Production
Capacity Centric:
Currently, the categorization of projects
to apply for prior Environmental
Clearance (EC) is defined under EIA
Notification 2006 on the basis of
production capacities of the project.
The production capacity is also one of
the major criteria considered by the
respective State Pollution Control Boards
during the grant of subsequent Consent
to Establish and Consent to Operate.

11. 11policy watch
Policy Barometer
The MoEF and SPCB should allow for
any reasonable addition in production
capacities that results from technological
upgrades and efficiency measures
implemented by the company to get the
best utilization of the assets without
compromising on the environmental
impact. The criteria of such relaxation
should be based on the extent of
reducing adverse environmental impact
of the project activities within the
acceptable limits of emission/effluent
discharge.
For many industries, achieving zero
effluent discharge is very difficult and
creates additional impacts such as
increase in energy consumption and
generation of large amounts of solid
waste. The focus, therefore, should be
on the reduction of fresh water use per
unit of product by benchmarking and
utilization of treated effluent by other
downstream users. For example, treated
effluent meeting standards applicable
for discharge on land use can be used
for irrigation purposes.
3. Providing Room to Clean
Technologies: The industry is willing to
explore the enhancement of productivity
and throughput without corresponding
increase in emission levels through
the use of clean technologies. In
fact, in many cases, such initiatives
reduce the net environmental impact
of industries. Projects based on waste
elimination through re-cycling or end-
use are an example. It was proposed
in 2009 to exempt such initiatives
from the provisions of Environmental
Impact evaluation and public hearing
but such notification was withheld
due to opposition from many non-
Governmental organizations. As a
result, the manufacturing industry is
discouraged to carry out initiatives
based on innovative clean technologies,
including the Clean Development
Mechanism. Environmental legislation
must follow a 'carrot and stick' strategy
otherwise environmental regulation
will replace industrial licensing and
controls as the new hurdle to industrial
growth.
It is suggested that while MoEF
pursues EC cases it must accord the
approval allowing for a 10 to 15
per cent increase over the baseline
production capacity due to technological
or productivity enhancement. It may
follow a self-certification process
where the manufacturing unit is only
required to furnish the reasons and the
environmental impact of its activities.
Automatic approval is deemed to have
be granted to the manufacturing unit
unless the MoEF responds with a query
or raises objections to certain issues
within a prescribed time period after
receipt of the application.
Although there have been efforts from the
Government to bring in more accountability,
transparency and streamlining of processes
leading to bringing in more efficiency, the
real challenge lies in making them effective.
There is a pressing need to consider
the growth requirements of the country
vis-à-vis the challenge of sustainability
and therefore, real achievement for the
environmental regulatory regime shall be to
bring down pollution levels in the natural
environment without creating barriers to
industrial growth.
On the policy front, the concept of
inclusive and sustainable growth needs
to be embedded in the agenda of various
Government policies and initiatives. The key
driving factors for such initiatives should be
the creation of employment opportunities
and promoting sustainable growth by
ensuring environmental sustainability
through green technologies, energy
efficiency, optimal utilization of natural
resources and restoration of damaged/
degraded ecosystems. n

12. The increasing challenge for environmental protection and conservation can be overcome by deployment of
suitable technology. Indian Industry has been making all efforts for meeting the notified emission limits from
time to time to comply with the evolving regulatory framework in India. A clear roadmap of environmental
standards and emission norms, which can be implemented over the next 10-15 years, needs to be developed
jointly by the Government and industry. This will help in preparing an implementable technology roadmap
without compromising the competitiveness of Indian Industry, whilst taking into consideration environmental
imperatives.
Ashish Aggarwal
Vice President – Government & Public Policy, Cummins India
India is on a path of progress. Electricity and reforms in the power sector will play a crucial role in India’s
development. With mass urbanization and increasing population, there has been a rising demand for electricity
in the nation, making the growth of the power sector inevitable. In a notable achievement, for the first time
in its history, India is set to achieve its electricity capacity addition target for any Plan period. This impressive
feat has been possible through advancements in power sector in terms of capacity and availability. But as
we look forward, there is a need to ensure that development is not achieved at the cost of sustainability,
because there is an inescapable link between energy use and the environment. It is far more efficient to take
environmental impact into account at the time an electricity system is planned, expanded, and reformed rather
than after the environmental damage has occurred and large, vested financial interests resist change.
Sunand Sharma
Co-Chairman, CII National Committee on Power and
President – ALSTOM International, India & South Asia and Chairman, ALSTOM India Limited
In the past, both Central and State Government agencies have made several attempts to simplify the procedure
for obtaining clearances. Despite this, there still remains much to be desired for them to become more efficient
and effective and ensure work is conducted in a transparent and coordinated manner. A close follow-up for
timely completion of the process would be essential to cut delays in project implementation.
Secondly, only a giant policy push will ensure that different categories of waste can go to the cement industry
for co-processing. As of today, a large quantity of industrial waste remains unutilized in our country. The world
over, co-processing has been well-recognized as a major waste management option. Not only does this offer a
solution to a variety of so-called ‘hazardous‘ and ‘non-hazardous’ industrial waste but also helps in achieving
savings in precious fossil fuels required to be burnt in cement kilns. Like several other countries, if our aim too
is to attain around 20-30 per cent Thermal Substitution Rate (TSR) by co-processing of combustible wastes in
cement kilns from the present level of <1 per cent, then extra efforts would be required by both the Central and
State Governments to play the role of an effective facilitator. An enabling regulatory environment with necessary
amendments made in the existing legislation would ensure creating a quick and smarter permitting process.
Ajay Kapur
CEO – Ambuja Cement
12 policy watch
Industry Voices
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