Sharma for mandatory green investment

Commerce minister says corporate entities should share 5% of their investment in improving local environment.

The department of industrial policy and promotion, under the commerce and industry ministry, has proposed that corporate entities should mandatorily invest five per cent of their investment in improving the local environment in lieu of relaxed environment clearance norms.

The suggestion came from Commerce and Industry Minister Anand Sharma during a recent meeting of a group of ministers on coal.

The proposal came during a discussion on the recent tightening of the mechanism for granting environment clearance to companies by the environment ministry. The ministry had issued a circular in November last year making firm coal linkage a criterion for the nod. Another circular followed in March this year making forest clearance a precondition for processing applications on green clearance.

Sharma said sequential processing of green clearance for a project creates problems for investors, adding that the environment ministry can allow relaxed clearance norms for projects costing up to Rs 100 crore. Alternatively, investors can be asked to spend five per cent of their investment on environment.

Proposals for environment clearance are considered on the basis of provisions under the Environment Protection Act of 1987. The environment ministry’s Environment Appraisal Committee discusses issues for compliance with requirements of the Act and recommends projects for clearance certificates.

Environment clearance norms are not voluntary in India and the government indicates a range of measures to be taken by corporates while issuing these certificates. These measures, which aim at containing environment degradation, include planting trees and compensatory afforestation.

Experts reject the efficacy of the commerce minister’s proposal to ask firms to commit investment on environment protection activities. “This is not a logical proposal. It would be more appropriate for the environment ministry to relax and reconstitute the criteria for ‘Go’ and ‘No-Go’ policy by making it more liberal,” said Amrit Pandurangi, senior director at consultancy firm Deloitte.

Relaxing forest and environment clearance norms to avoid delays in processing of applications was one of the recommendations by the B K Chaturvedi committee, formed by the 12-member ministerial panel to look into the matter.

The panel, headed by Finance Minister Pranab Mukherjee, would take a call on the suggestions on August 24.