Jairam goes, green policy may lose its colour a bit

New Delhi: New environment minister Jayanthi Natarajan is likely to be more flexible towards industry to help power Asia’s third-largest economy, although a complete turnaround in tighter enforcement of green policies pursued by her maverick predecessor is ruled out.

[caption id=“attachment_40842” align=“alignleft” width=“380” caption=“Under Ramesh, India halted more than 60 big-ticket projects and held up more than 450 of them, heightening the risk for investors. Jessica Rinaldi / Reuters”]  [/caption]

Natarajan, a 57-year-old spokeswoman of the ruling Congress party, takes over from Jairam Ramesh, who set new standards in compliance that often brought him into conflict with industry but put environment issues in the spotlight. Natarajan’s arrival could help hundreds of projects held up on green worries, including Tata Steel’s $4.4 billion steel mill, ArcelorMittal’s iron and manganese ore mine and dozens of power and oil and gas projects.

“We don’t think there will be any backsliding in policy because Ramesh has spotlighted it permanently,” said a senior government official on condition of anonymity. “What we can see, though, is some more flexibility because she may have come with a mandate to be sympathetic towards industry given our imperative to grow.”

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

Under Ramesh, India halted more than 60 big-ticket projects and held up more than 450 of them, heightening the risk for investors and underlining India’s struggle to grow without damaging its environment – a tussle crucial to shaping the future of its 1.2 billion people.

But Ramesh’s success lay in putting environment issues firmly in the public imagination, a move that put him on a collision path with some of his Cabinet colleagues and even the prime minister’s office backing more factories, mines and power plants to pull millions of people out of poverty.

Whether or not Natarajan backs industry, she may have to pursue Ramesh’s agenda of compliance, especially given the realisation in India and among investors that enforcing green laws does not have to hurt growth, can boost the idea of rule of law and make government policies transparent.

“From that point of view it will be difficult for a new minister to change policy drastically because it will not go down well with the public,” said Srinivas Krishnaswamy, CEO of green policy consultants Vasudha India. “But Jayanthi may not be as bold as Ramesh in standing up to pressure from industry and she could be more flexible when it comes to approving projects. Her best chance would be to try to strike a balance.”

Industry vs Politics?

In India, saving forests and mountains is more than just about protecting the environment. Years of uncontrolled mining has pushed tribal people off their forest land, alienating them and fuelling insurgencies that feed off a perceived neglect of the poor.

Two-thirds of the population makes a living from farming and a growing Maoist rebellion has capitalised on farmers’ resentment over the government’s seizure of their land for industry. In pursuing her environment policies, Natarajan’s hand will probably be strengthened by support from her Congress party chief Sonia Gandhi, a left-leaning centrist who can ill afford to antagonise millions of rural voters who are most affected by huge mining and manufacturing projects.

Her party faces national elections in 2014. Given that, Natarajan will be expected to follow policy that does not upset voters in the countryside and millions of tribes living in the resource-rich forests and mountains of India.

Yet, the need for growth is clear in a country where about 40 percent of the population live on less than $2 a day, and the government could be trying to send a positive signal to investors with a change of guard at the ministry. “Jairam has rubbed too many feathers along the way, he’s been a bull in a China shop. Jayanthi Natarajan will be a more balanced person,” said BG Verghese, professor at the Centre for Policy Research, New Delhi.

Natarajan is a green enthusiast and a member of her local state environment group. She wrote in an article last month environment is “an issue that is crucial to our survival as a democracy and even as a people.” In her spare time, she plays the ancient Indian string instrument, the Veena. She has been a past minister, including running the civil aviation department.

“In terms of profile, she is equally competent and vocal,” said Sunita Narain, head of the Centre for Science and Environment. “This shows the government places a lot of emphasis on environment issues.”

Reuters