Environmentalists, among others, argue that the country’s probably losing a lot more in terms of degradation of natural resources than it is gaining from several large industrial projects, and this is probably true. But for the country as a whole, a paper by Purnamita Dasgupta and Shikha Gupta (http://www.icrier.org/publication/working_papers_214.html) at ICRIER points out, development is taking place in an environmentally sustainable manner with ‘no net decumulation of assets, notwithstanding the degradation of natural capital stocks’. The two look at all forms of capital, from human capital to natural capital (degrading of soil, for instance) and the carbon footprint of investment and come to an aggregate picture of the costs and benefits — addition to human capital through education is a positive while the depletion of natural capital and carbon emissions are both negatives. So while, for instance, the paper points out overall investment levels in the country were 33 per cent of GDP in 2004-05, and once the environmental and other degradation costs are taken into account, the ‘genuine’ investment rate falls to between 20 and 23 per cent depending upon what exclusions are made for environmental degradation. While that’s a big difference, it shows that economic growth is not taking place at the expense of the environment. Now to see whether environmentalists agree with the results.
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