Economic Development and Environment

The Indian economy is characterized by extraordinary contrasts. On the one hand, it is the fourth largest economy in the world in terms of purchasing power parity. It has been growing at an average rate of more than 8% per annum since 2003–2004, and the annual per capita income is increasing at the rate of about 7%. On the other hand, about one-third of the total population of the country survives on less than US$1 per day. Both sides of the picture are leading to degradation and depletion of the environment and natural resources. Similarly, the country has elaborate statutes, regulations, institutional frameworks, and policies for environmental conservation and preservation. The complexity and magnitude of environmental problems are increasing at a very high pace due to weak monitoring and enforcement and lack of capabilities (Gupta, 2001). These contrasts are posing a question about the sustainability of the present growth trajectory from both economic and environmental points of view. This chapter intends to provide a critical account of India's development history from independence and, more particularly, after the early 1990s. In 1991, India altered its development strategy from an inward-oriented development path to a path that integrates the economy with the global economy. Note that, though the development strategy has been changed drastically, the regulatory and institutional framework for environmental protection and conservation has not been updated according to the changed scenarios. As a prelude to examining alternatives for environmental regulations, this chapter analyzes recent economic and environmental trends.