The EIA 2020 draft notification was published by the Ministry of Environment, Forest and Climate Change (MoEF&CC), intending to replace the existing Environmental Impact Assessment Notification, 2006 under the Environment (Protection) Act, 1986. Ever since it was published, the draft was subjected to criticism and debate over its departure from existing regulations. Here is an overview.

What is EIA?

Environmental Impact Assessment (EIA) is a decision-making tool based on the study of the effects and impact of a particular proposed project on the environment. The EIA compares various alternatives available for a project, to identify the best option in terms of both financial and environmental costs, while ensuring they meet the desired objectives of the project.

EIA tries to predict both the positive and negative consequences even before the actual execution starts, so that these impacts can be mitigated by setting mitigative measures, both preventive and corrective.

By proactively considering such environmental impacts early in the planning process and setting up mitigative measures leads to benefits on multiple fronts such as:

• Environmental protection and sustainable development
• Optimum utilization of resources
• Public awareness
• Lesser conflicts later on during execution
• Increased project acceptance

History

The concept of EIA was first introduced in the US back in the early ’70s. Until then, projects were analysed only from a technical and economic feasibility, with little to no thoughts about the potential environmental impacts of the same.

Though, we in India started looking at projects from an environment angle back in 1976-77. It further took us nearly 20 years to make Environmental Clearance (EC) mandatory.

It was only on 27 January 1994, by the Assessment Notification by the Government of India’s Union Ministry of Environment and Forests (MEF)on Environmental Impact Assessment of Development Projects under the Environmental (Protection) Act 1986, Environmental Clearance (EC) was made mandatory for expansion or modernisation of any activity or for setting up new projects.

The current form of EIA is from 2006, with amendments made till 2015.

EIA 2020 Draft Notification

The Ministry of Environment, Forest and Climate Change (MoEF&CC) has published the new draft Environment Impact Assessment (EIA) Notification 2020, intending to replace the existing EIA Notification, 2006 under the Environment (Protection) Act, 1986. And along with it came an array of criticism and debates over its deviations from existing regulations and dilution of major clauses, including those of Public Consultations. Let’s take a look at some of them.

Key Issues

Well, if everything about the EIA is about protecting the environment and on benefit of it, why such an uproar about the new EIA 2020 Draft Notification?

The fundamental problem with the new EIA Draft 2020 is that it dilutes the underlying objective of having the EIA in the first place. And this they say is to improve ease of doing business, more transparent and expedient through implementation of online system, further delegations, rationalization, standardization of the process, etc, but at the cost of weakened environmental regulations, decreased community involvement and knocking off the balance between sustainable development and environmental protection.

Post-facto Clearance

Post-facto clearance makes it possible for projects that are already in violation of the Environment Protection Act to apply for clearance.

This is despite the Supreme Court ruling on April 1 on the Alembic Pharmaceuticals Ltd. versus Rohit Prajapati & Ors. case that issuing of ex post facto clearances is contrary to law and held that the concept of an “ex post facto environmental clearance” was not sustainable with reference to any provision of law.

Dealing with violations

The draft EIA states that notice of violations i.e cases where projects have either started the construction work or installation or excavation, whichever is earlier, on site or expanded the production and / or project area beyond the limit specified in the prior-EC without obtaining prior-EC or prior-EP can only be made on the:

• By the “suo moto” application of the project proponent or
• By any Government Authority or when
• found during the appraisal by Appraisal Committee; or
• found during the processing of application, if any, by the Regulatory Authority.

This is like saying if a thief had committed a theft, he/she should report the crime at the nearest Police Station pro-actively!!

Also, the quantum of penalties levied on notice of violation is too small to deter project proponents from committing such violations.

On cognizance of violation through suo moto application (by the violator itself), a late fee of Rs. 1,000/- per day in case of Category ‘B2’ projects; Rs. 2,000/- per day in case of Category ‘B1’ projects; and Rs. 5,000/- per day in case of Category ‘A’ projects. And double that amount, if reported by a government authority.

Also, all a violator needs to do in case proven guilty are two plans for remediation and resource augmentation corresponding to 1.5-2 times the “ecological damage assessed and economic benefit derived due to violation”

Dilution of Public Consultations

One of the greatest strength of the current EIA norms is that it encouraged public participation in the process through public hearings to be arranged in a systematic, time bound and transparent manner ensuring widest possible public participation at the project site(s) or in its close proximity.

The new draft dilutes this objective in the following manner

• The project proponent shall arrange for “one” hard copy and one soft copy of the draft EIA Report, whereas in the earlier amendment this number was “10”
• Reduced the time allocated for responding from 30 days to 20 days.
• There is no minimum attendance requirement to start the proceedings of the public hearing.
• The draft allows for conducting the public hearing through any other appropriate mode, as recommended by the Appraisal Committee, or the Regulatory Authority.
  • But this is not a very solution because, if the authority decides to conduct the meeting via Video Conferencing, it might not be possible for all the community members to take part in it.

Baseline data from only one season

An EIA report needs baseline data to predict the impact of the project on the environment. The current draft proposes to assess data for a single season, excluding monsoon for this purpose. This will lead to less reliable data and projections for the EIA report, causing it to be misleading.

Relaxed Norms for buildings

Confederation of Real Estate Developers Association of India (CREDAI) an association comprising all big players of India was against the EIA rules on buildings since the 2006 amendments that brought all projects between 20,000 square metres and 1,50,000 square metres within the ambit of EIA. The real estate industry supported the environment ministry’s proposal to relax the area criteria from 20,000 square metres to 50,000 square metres.

This was an attempt to extend the limit of 20,000 sq meters to over 50,000 sq meters and thus make the EIA process ineffectual for buildings as over 90% of buildings fall under that category.

The Union Ministry of Environment and Forests issued the January 19, 2009 draft notification of Environment Impact Assessment (EIA) rules to exclude construction projects including the housing projects, commercial and retail construction that are less than 50,000 sq. mt. of built-up area from the ambit of the Environment Impact Assessment and the Environment Protection Act 1986.

This limit was further increased to 1,50,000 sq meters in the current draft, virtually rendering the EIA process useless for buildings in the EIA Draft 2020,

Strategic Label

The current draft allows for certain degree of relaxation of EIA for any project that has been classified as “Strategic” and in “National Interest” This allows for labeling projects as “strategic” to bypass the EIA norms. The draft does so by saying that “no information relating to such projects shall be placed in the public domain.”

While these hold acceptable for projects concerning national defence and security, the lack of clarity around projects “involving other strategic considerations, as determined by the Central Government” is a cause for concern.

Relaxed Post-Approval Monitoring

The frequency of post approval monitoring has been reduced from once in six months to once in a year. Also, the project proponent can delay the submission of submission of yearly compliance report for 3 consecutive years by paying small amounts of fine amounting from 500 to 2500 rupees a day.

EIA Exemptions

Under clause 26 of the EIA draft, over 40 exceptions including, but not limited to the following are proposed:

• Solar Photo Voltaic (PV) Power projects, Solar Thermal Power Plants and development of Solar Parks
• Coal and non-coal mineral prospecting
• Secondary metallurgical foundry units
• Manufacturing and processing of a variety of chemicals

Suggestions

1. Projects should not be granted post facto clearances.
2. Ensure local affected persons or others who have a plausible stake in the project to report violations rather than suo moto applications and by governing authorities.
3. Ensure greater public participation by increasing the time allowed for responding from 20 days to a minimum of 45 days.
4. Ensure the number of hard copies of the EIA report to be maintained for public consultation to be not less than 10.
5. Ensure the public consultations take place physically rather than through alternate methods as recommended by the committee.
6. Set in place, a minimum attendance requirement for public consultations to be considered valid.
7. Other than projects concerning national defence and security, clearly define which projects make up Projects of Strategic Importance.
8. Continue enforcing EIA norms on building projects greater than 50,000 square metres.
9. When calculating baseline date, ensure data is collected all year and not just for a single season to ensure data reliability.
10. Ensure compliance reports are submitted bi-annually and revoke EC/EP if violations continue for 2 consecutive terms of 6 months.

What can you do?

The draft itself encourages public participation, and as responsible citizens, it’s our duty to raise concerns regarding such a sensitive topic concerning our environment. We need to involve ourself in such issues and not wait for another tragedy to strike to raise our voices.

Any person interested in making any objections or suggestions on the proposal contained in the draft notification may forward the same in writing for consideration of the Central Government within the period so specified to the Secretary, Ministry of Environment, Forest and Climate Change, Indira Paryavaran Bhawan, Jor Bagh Road, Aliganj, New Delhi 110 003, or send it to the e-mail address at eia2020-moefcc@gov.in

Last date for submission of objections or suggestions: August 11, 2020.

Conclusion

The fact that we are even discussing administrative and judicial notification on public domain shows how concerned people are over the impact of such a diluted EIA notification can have on our environment and future generations. A lot of young students, activists, environmentalists, social media influences etc have taken up this issue seriously and are doing a magnificent job at informing and educating the general public about such a move.

Let’s hope with the kind of public participation currently seen, a better and comprehensive Environmental Impact Assessment norms will be set in place, where both development and environment are equally winners and ensure environmental damage does not end up as an acceptable collateral cost for development.

Have I missed any of the key issues? Have a difference of opinion on any of the issues raised? Have a great suggestion? Do let me know them in the comments below.

References

1. EIA Draft Notification 2020 (Important points highlighted)
2. Environment Impact Assessment for Buildings: Kid’s gloves
3. EIA Draft 2020: All the ways it weakens an important environmental safeguard
4. Why draft EIA 2020 needs a revaluation
5. Centre for Science and Environment: Understanding EIA
6. Draft EIA notification fosters non-transparency, encourages environmental violations
7. Draft EIA notification institutionalises 1 season data for baseline
8. Primer on the Draft EIA
9. Civil Appeal No. 1526 of 2016, Alembic Pharmaceuticals Ltd. versus Rohit Prajapati & Ors

Request to readers: EIA needs your attention, if you think so too, read about it, engage in discussions, make up your mind and add your inputs to the public consultation process by sharing your thoughts to eia2020-moefcc@gov.in by August 11, 2020

E S Krishna Ram

Krishna Ram is the man behind the website you are currently on. For more updates follow me:

The post EIA Draft 2020: An overview appeared first on E S Krishna Ram.

It’s been around a week since the honourable Finance Minister Smt. Nirmala Sitharaman presented her 2^nd full Union Budget of India. The Union Budget comes at a time when the nation is under the grip of a severe economic slowdown with the GDP growth rates at 4.5% for Q2 2019-20. With the growth rate lowest in over 6 years and falling continuously for 7 quarters now on the back of declining demand, expectations were definitely high for some much needed corrective measures to bring the economy back on track.

Below is a personal analysis of the budget from my limited viewpoint. Only key proposals from the budget have been discussed with respect to farmers, youth, investors, start-ups in addition to its impact on economic development and the new tax system.

For farmers

Agriculture along with its allied sector still form the largest source of livelihood in India. Around 70 percent of our rural households still depend primarily on agriculture for their livelihood, with 82 percent of farmers being small and marginal. A key section of budget is dominated by policies and initiatives for the farmers.

Key Initiatives:

• Establishing new and efficient warehousing centers at the block/taluk level by providing Viability Gap Funding (VGF) on a PPP mode.
• Kisan Rail: Establishing a seamless national cold supply chain for perishables such as milk, vegetables, meat and fish through the Indian Railways via PPP arrangements.
• Krishi Udaan: Similar to Kisan Rail, this scheme will be launched by Ministry of Civil Aviation. The scheme will provide much needed access to domestic and international markets and will prove especially useful to farmers belonging to northeast and tribal areas.

Statistics show that around 25-30% of fruits and vegetables produced in the country are wasted because of the lack of cold storage facilities. With India having an estimated capacity of 162 million tonnes of agri-warehousing, cold storage, reefer van facilities etc. NABARD is expected to undertake an exercise to map and geo-tag them to bring much needed efficiencies in agricultural supply chain.

Though the idea of transporting goods by rail had been proposed before, by the then Railway Minister in 2009, the project had failed to take off. Such a move to explore air and rail modes for transportation of perishables is a good initiative and would definitely help in the current gaps in last mile connectivity to ensure end to end supply chain.

The above 3 proposals are much needed and ambitious initiatives and if executed properly would ease a lot of burden on the farming sector

Budget Estimate for Agriculture, Irrigation & allied activities – Rs 1.60 lakh crore

For youth

We have been hearing about demographic dividend and the advantage we pose in terms of working population for some by time now. It is estimated that by 2030, India will have the largest working population in the world. Having an educated and employed youth would be the backbone for the country going forward.

Key Initiatives:

• The New Education Policy to be announced soon.
• External Commercial Borrowings and FDI in education system to attract talented teachers, innovate and build better labs.
• About 150 higher educational institutions will start apprenticeship embedded degree/diploma courses by March 2021.
• Urban local bodies across the country would provide internship opportunities to fresh engineers for a period up to one year.

With unemployment rates above normal and unemployability of engineers rising, initiatives such as embedded apprenticeships and mandatory internships would do wonders to provide a practical outlook for students and also improve the quality of education. I hope internships are given more importance and even considered mandatory like house surgency for medical students.

Budget Estimate for Education Sector – Rs 99,300 crore and Rs. 3,000 crores for skill development.

For economic development

Infrastructure

National Infrastructure Pipeline was already unveiled on 31st December 2019 of Rs. 103 lakh crore. It consisted of more than 6500 projects across sectors and are classified as per their size and stage of development.

Key Initiatives:

• National Infrastructure Pipeline: Already unveiled.
• Project Preparation Facility for infrastructure projects: The programme would actively involve young engineers, management graduates and economists from our universities.
• National Logistics Policy: To be unveiled soon. It will create a single window e-logistics market and focus on generation of employment, skills and making MSMEs competitive.
• Accelerated development of highways.

I have already written a detailed article on “Why the National Infrastructure Pipeline matters” and its implications, you can read the article here.

Logistics sector is a major accelerator for trade. The need for such a policy is evident from the fact that logistics costs around 13-14% of GDP. This figure is comparatively higher than global counterparts. The proposed single window system is expected to cut this to about 10%

The proposed highway development will include development of 2500 Km access control highways, 9000 km of economic corridors, 2000 Km of coastal and land port roads and 2000 km of strategic highways. The much delayed and anticipated Chennai-Bengaluru Expressway is also expected to started soon.

A huge employment opportunity exists for India’s youth in construction, operation and maintenance of infrastructure. The National Skill Development Agency is poised to give special thrust to infrastructure-focused skill development opportunities.

Railways

After the practice of a separate Railway Budget was scrapped in 2016, the railways now find a mention in the union budget.

Key Initiatives:

• Setting up a large solar power capacity alongside the rail tracks, on the land owned by the railways.
• Station redevelopment projects (4) and the operation of 150 passenger trains through PPP mode.
• 148 km long Bengaluru Suburban Transport Project at a cost of Rs. 18600 crore.

Anyone from Bengaluru would definitely be hyped hearing about a Bengaluru Suburban Project. The 37 year old wish again finds a mention in a Union Budget, but not for the first time. The project was similarly mentioned a couple of years too. Citing a recent report, Bengaluru is the world’s most traffic congested city and the introduction of the suburban rail network will help in providing the residents an alternative to reach their destinations on time .

Budget Estimate for Transport Infrastructure: Rs. 1.70 lakh crore.

New Economy

Good to see government seeing opportunities of the future and understanding that the new economy is based on innovations that disrupt established business models through Artificial intelligence, Internet-of-Things (IoT), 3D printing, drones, DNA data storage, quantum computing, etc. and are re-writing the world economic order.

An Budget Estimate of Rs 8000 crore over a period five years have been allocated for for the National Mission on Quantum Technologies and Applications.

Affordable Housing

Affordable housing has been one of the important projects by the current government to provide housing for all. In order to boost the supply of affordable houses in the country, a tax holiday is provided on the profits earned by developers of affordable housing project approved by 31st March, 2020. Such a tax holiday has been extended by one more year to incentivise developers in this space.

For investors

Markets have been at all time highs even though there was no solid numbers to back the market run after the government announced the corporate tax cut in september. Expectations were high on the budget, however the markets reacted to the budget in the negative with the benchmark index, Sensex falling nearly 1000 pts.

Key Initiatives:

• The Deposit Insurance and Credit Guarantee Corporation (DICGC) has been permitted to increase Deposit Insurance Coverage for a depositor, which is now Rs 1 lakh to Rs 5 lakh per depositor.
• New Debt-ETF consisting primarily of government securities in light of the success of the Debt-based Exchange Traded Fund (ETF) recently floated by the government.
• The government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
• Removal of Dividend Distribution Tax (DDT) and adoption of the classical system of dividend taxation

Criticism:

• Dividends are distributed from profits after tax (PAT). Any kind of tax on on PAT, be it on the hands of the investor or the company is a form of double taxation and could have been avoided.
• Disinvestment target set for the upcoming year seems unattainable. This becomes especially evident given the fact that government seems to be able to attain only around 25% of the current year’s target.
• Markets were expecting a Long Term Capital Gains tax rejig, however nothing of that sort happened, sending the market down, at least for the day.

For start-Ups

With startup ecosystem booming in India, the Finance Minister offered some tax sops to early stage startups including:

• Employee Stock Ownership Plan (ESOP) tax deferred by five years or till they leave the company or when they sell their shares, whichever is earliest.
• Eligible Start-ups having turnover up to 25 crores is allowed deduction of 100% of its the profits for three consecutive assessment years out of 10 years if the total turnover does not exceed 100 crore rupees.

Criticism:

Tax deferral on ESOPs are not applicable to the 20,000 odd startups registered in India, but restricted to about 250 start-ups chosen by the government.

Taxation

Taxation proposals are some of the most sought after and discussed sections of any budget speech. Expectations for direct tax cuts were high given the fact that corporates got their share through a corporate tax cut in september. The Finance Minister delivered on this expectation in form of a tax cut, but with a twist.

A tax collector should collect taxes from a taxpayer just like a bee collects honey from a flower in an expert manner without disturbing its petals.

~Kautilya in Arthashastra

We currently had a 4 slab (effectively 3) tax structure. This was replaced by a 7 slab system with an option to choose between the two given in the table below.

How the new tax system works is explained below:

Option 1: Adopt the existing tax system and current tax slabs (higher) while enjoying tax deductions and exemptions.

Who is it for: Taxpayers who are already in a position to avail deductions such as interest paid on home loans and education loans, tution fees paid for children, insurance etc.

Option 2: Adopt the new tax system with lower tax slabs but forego about 70 deductions and exemptions, in a move to simplify tax filing and administration.

Who is it for: Taxpayers who are relatively new entrants and don’t have tax deductible investments or options will get benefited from a lower rate.

Intent:

• Such a move seems to simplify the tax filing and administration process. In effect, the move may be cumbersome to individuals (compare both options and then choose one) but definitely make the filing process easy with less exemptions and deductions to wrap your head around.
• Another intent of making away with exemptions leads individuals to spend money now rather than park it away for tax benefits (through 80C sub-sections such as ELSS and Insurance) in an attempt to drive up consumption in the short run.

Concluding Remarks:

The Union Budget was full of normal, regular and much needed policy framework and budgetary outlays. This comes only as an incremental update to the previous ones. Though touted as a populist budget, for offering major direct tax cuts for taxpayers, it seems to fall short of the general expectations is due to the lack any major direction to revitalize the falling demand in the economy which was highly expected. Surely the budget is only a proposal, I hope to see more of extra-budgetary policies and announcement in the days to come.

Major Sources:

• Union Budget Speech
• Draft National Logistics Policy
• National Infrastructure Pipeline
• PwC Union Budget Analysis

What do you think of the latest Union Budget? Disagree on some points? Do let me know in the comments below.

E S Krishna Ram

Krishna Ram is the man behind the website you are currently on. For more updates follow me:

The post Union Budget Analysis: A personal take appeared first on E S Krishna Ram.