Author: cprindia

By Partha Mukhopadhyay and Eesha Kunduri¹

Informality and functionality are intricately interlinked in our cities, for “the informal city is very much the functioning city” (Mukhopadhyay 2011). Policymakers, urban local bodies and government agencies need to move beyond dichotomies such as formal and informal, planned and unplanned, and recognise the interconnections among these. The relationship between manufacturing and urban planning needs to be redefined. More attention to informal manufacturing in our cities, where women constitute a visible segment of the workforce, and facilitating its connections to the formal segment will bear rich dividends, not just in supporting manufacturing, but also in raising female labour force participation, another critical policy goal.

Beyond Slums and Vendors – Factories

Two strands of discussion appear to dominate the discourse about cities and informality. First, the auto-constructed nature of most urban neighbourhoods², and the need for regularisation and in-situ upgradation of informal settlements. Second, promoting and supporting informal livelihoods like street trading and hawking. There is, however, another form of informal activity that is central to our cities – informal manufacturing and informally employed workers in formal manufacturing. Even when regularisation is initiated, the focus in cities across the country – whether in Delhi, Bengaluru or even the smaller towns of Maharashtra – has been on residential and commercial activity, and rarely on industrial activity. Importantly, these enterprises constitute a significant source of urban employment, particularly for women, and as such, call for policy attention.

The question of informal manufacturing is not only a question of registration and tax status of an enterprise – indeed it may well be registered – it is also about the tenuous relationship between manufacturing and urban planning and needs to be understood in this context.

Industry and the city: The case of Delhi

Delhi’s industrial landscape is dotted with several small-scale industries, wherein garment and footwear manufacturers comprise the largest share, followed by electrical machinery production and repair services (GNCTD 2010). Industrialisation in Delhi has been marked by contestations over space, and the relocation of ‘hazardous and noxious industries’, ‘large and heavy industries’, and ‘non-conforming industries’ to peripheral areas of the city. This relocation was upheld by the Supreme Court in 1996, and in its immediate aftermath, resulted in unemployment for the urban poor and migrant workers who had come to depend on these industries for their livelihoods.

Currently, Delhi has industrial activity spread over 28 planned estates, 4 flatted factory complexes, and 22 industrial areas ‘notified for regularisation’. The areas ‘notified for regularisation’ or ‘non-conforming’ industrial areas as they are otherwise known are spaces of manufacturing activity that have emerged in residential areas, particularly around urban and rural villages in response to a range of market demands. Many of these unplanned industrial areas could be said to have emerged on village lands earmarked for residential (abadi) and/or agricultural use. While there are some planning exemptions within village boundaries – lal dora areas – these do not extend to industrial activity. Thus, these areas are unplanned, unauthorised and ‘non-conforming’ in the sense of being located in areas not zoned for industrial use.

The Master Plan for Delhi (MPD) 2021 states that unplanned industrial areas are eligible for regularisation if more than 70 % of the plots in the area are engaged in industrial activity and subject to fulfilment of other stipulated conditions. It lays down guidelines for the redevelopment of these areas; pertaining to aspects like road widening, provision of services, adherence to pollution control norms, and development of open spaces and parking facilities, among others. The redevelopment plan is required to be formulated by the local body or land owning agency in consultation with a society of land owners in the industrial area, which should be mandatorily formed (DDA 2010).

In practice, however, most non-conforming industries have been subject to sealing drives to close them down, and there has not been a push for their redevelopment: neither from the owners of small-scale enterprises in these areas nor from the local bodies or concerned government agencies. Industrial activity is seen as largely operating in violation of Master Plan provisions, as a source of pollution and therefore, as an aberration to a larger vision of the city. When the Supreme Court first ordered industrial relocation, units in non-conforming areas were asked to apply for plots in the new industrial areas that were developed (mostly on the fringes): a little over 50% of the applications were found eligible and allotted plots. The approach to regularisation has entirely been on relocation; units that were allotted plots but continue to function from the non-conforming areas (and did not shift for a variety of reasons), those that were found ineligible for an alternative plot, and those that function in violation of various industrial planning regulations are all subject to being closed down.³

In the push to create world-class, clean and green cities, the focus often seems to be on the knowledge economy – IT and IT-enabled services – with manufacturing activity relegated to the fringes of cities. The Delhi case illustrates this starkly. Further, in interviews, industrialists argued that Delhi is an unfriendly space for industrial growth, and emphasised the gradual shift of manufacturing hubs to the neighbouring state of Haryana, alluding to agglomeration benefits and tax incentives, among other reasons.

But relocations are disruptive processes: they adversely affect both factory and home-based work for those engaged in them, particularly disadvantaging women, disrupt local work networks, and increase search, time and distance costs for new jobs. In Chennai’s Kannagi Nagar resettlement colony, located along the city’s IT corridor, Coelho, et. al. (2013) found that: “Industrial relocations increase the costs for workers to access their jobs, and depress real wages due to the fall in demand for certain kinds of work.” As nearby factories shifted further away, they found it adversely limited work and livelihoods.

Planned and unplanned industrial areas: Co-located and Inter-linked?

While the Master Plan for Delhi (MPD) 2021 and the Industrial Policy for Delhi 2010-2021 distinguish between planned and unplanned industrial areas, narratives from the field stress the linkages between these two typologies of areas. In both these areas, industries are engaged in a range of manufacturing activities spanning, inter alia, footwear, auto-parts, garments, plastics, steel, etc. and are typically described as ‘business-to-business’ (B2B) enterprises that supply raw material and intermediate products to bigger firms in the vicinity. In interviews in an industrial area in North-West Delhi, factory owners in both the planned as well as surrounding unplanned areas spoke about interlinked activity chains: footwear straps manufactured in an unplanned areas, for instance, supplied to factories manufacturing soles in the planned areas; sorting of residual cloth received from textile hubs like Jaipur and Gurgaon, which is sold in a ‘kattar’ (residual clothes) market. Owners in the planned areas also spoke of a ‘broken chain’ due to ongoing action in the city to close down the unplanned factories, at the time of field research.

The two kinds of industrial areas are also linked in the sense of labour circulation. Being located close to each other, they draw upon the same pool of workers residing in nearby bastis, urban villages, resettlement colonies and unauthorised colonies (see Sharma and Kunduri 2015). Workers typically access work through local networks of contractors and neighbours and move between planned and unplanned areas based on availability of work.

Women’s work and unplanned industrial areas

Unplanned industrial areas also provide relatively flexible work arrangements that some women may prefer. In earlier fieldwork in East Delhi for instance, some women reported preference for work in workshops on the periphery of an urban village on account of spatial proximity, and the ability to return home during breaks, particularly to attend to children (Sharma and Kunduri 2015).  Geert De Neve (2012) makes a similar observation in his distinction between large apparel firms and smaller workshops in Tiruppur in Tamil Nadu. In more recent fieldwork in Delhi, a female worker, who works on daily wages in an unplanned area and looks for work every day, stated she preferred this arrangement over earning a meagre wage in the authorised industrial units, where they are often expected to work overtime.

Co-located planned and unplanned industrial areas also create home-based work opportunities for women, which is localised and driven by spatial networks of “jaan-pehchaan” (familiarity)., Though it can be low-paying and precarious, home-based work may be preferred by women for reasons of flexibility and legitimacy. It enables women to manage housework and childcare responsibilities along with undertaking paid work from home. It is seen as a legitimate work choice for many women, for whom going out to work in factories is often accompanied by notions of stigma and shame (Sharma and Kunduri 2015).  In the areas studied, home-based workers were involved in a whole spectrum of work, such as putting threads into bookmarks, taping of speaker components, making decorative pieces, making buffs for machines polishing steel, making bindis, fixing insoles and upper parts for footwear, etc. Most of this work is outsourced from factories in planned as well as unplanned industrial areas, many of which are small workshops operating within urban villages and unauthorised colonies. Women are remunerated at piece-rates. In the absence of designated work spaces, work is undertaken in groups using shared spaces – in common courtyards of tenements, and on cots outside their homes in bastis. Contractors and sub-contractors (often female) who bring the work to the women are often embedded as residents, thereby leveraging their connections and building relationships of trust.

Key Policy Takeaways

Regulate and regularise existing industrial areas

Instead of pushing industries to city peripheries and industrial parks with poor transport connectivity, we need measures to regulate existing industrial areas in the city, while ensuring their conformity to environmental, safety and labour regulations. The latter two are particularly important in light of several cases of factory collapses and blatant violations of labour safety and welfare; but should not be used as an excuse to drive away factories themselves. It should also be noted that when it comes to regularisation/ redevelopment of unplanned industrial areas, ‘unrealistic planning norms’ continue to hinder.⁴ Industrial planning norms, thus, need to be modified to allow more flexibility in redevelopment of unplanned areas. In this, planners can draw upon instances of regularisation of residential areas like unauthorised colonies in Delhi and gunthewaris in Maharashtra (Bhide 2014). Like residential and commercial areas, the regularisation of industrial areas too needs to become a part of our urban planning discourse.

Redevelop and redesign neighbourhood amenities to encourage female labour force participation 

A key benefit of regularising these industrial clusters is the retention of a number of female jobs. Redevelopment of industrial areas must thus be accompanied by interventions in the nearby residential settlements in a manner that encourages more women to participate in the labour market. In the case of home-based workers, workspaces are intertwined with living spaces, creating constraints on space. Women make do with whatever little community spaces they can manage to access. It is essential for cities to recognise that urban neighbourhoods are beyond residential, and develop amenities from the perspective of both work and living. This would involve redesigning neighbourhood amenities like community halls for multiple uses, including common workspaces – in the fashion of the co-working spaces that have emerged to support modern start-up and innovation ecosystems — for home-based workers with amenities like toilets, lighting and ventilation.⁵ Urban local bodies should be sensitised and empowered to do this.

Conclusion

In line with unauthorised residential and commercial areas, the regularisation of unauthorised industrial areas needs policy attention, not only because they are deeply imbricated with authorised industry and are essential to the growth of manufacturing, but also because they provide flexible work options to many women, who would otherwise not be in the workforce. This can be done, in many instances, without harming the environment. Indeed, the planning philosophies that underpin the guidelines that render them illegal may no longer be appropriate, given the technical progress and the imperative of compact, mixed use cities. This entire approach to excluding industry, particularly the informal sector, from our cities needs to be discarded.

¹ We draw upon Eesha Kunduri’s research engagements in Delhi’s industrial areas to illustrate issues in this note. Some of the examples here draw upon field interactions over August 2018 to January 2019, conducted with Ritika Gupta, as part of the IWWAGE-IFMR initiative at ISI, Delhi led by Farzana Afridi.
² Auto-construction refers to the process by which residents access resources, materials, “permissions”, lay out settlements and construct houses on their own. It is not necessarily “self-built”, in that it may involve the use of masons and contractors for construction of houses as well as common infrastructure, like drains, etc.
³ Interactions with officials at Municipal Corporation of Delhi (Civic Centre Office) and Delhi State Industrial and Infrastructure Development Corporation Ltd. (DSIIDC), as part of the IWWAGE-IFMR study (at ISI, Delhi) referred to earlier.
⁴ For instance, the MPD 2021 guidelines for redevelopment of unplanned areas stipulate a minimum reservation of space: 10 % for ‘circulation / roads / service lanes’, ‘parking and loading / unloading areas’, infrastructure like Pump House, Fire Station and Police Post; and 8% for ‘parks / green buffer’. Given the density of most unplanned industrial areas, such norms render redevelopment infeasible.
⁵ Discussions with Shalini Sinha of WIEGO and Firoza Mehrotra of HomeNet South Asia.

References

Bhide, A. (2014). The regularising state, Economic and Political Weekly, 49(22), 92-100.

Coelho, K., Venkat, T., & Chandrika, R. (2013). Housing, Homes and Domestic Work: A Study of Paid Domestic Workers from a Resettlement Colony in Chennai, Economic and Political Weekly, 48(43), 39–46.

DDA. (2010). Master Plan for Delhi 2021. New Delhi: Delhi Development Authority (Reprint Edition). https://dda.org.in/ddanew/pdf/Planning/reprint%20mpd2021.pdf

De Neve, G. (2012). Fordism, Flexible Specialisation and CSR: How Indian Garment Workers Critique Neoliberal Labour Regimes, Ethnography, 1–24.

GNCTD. (2010). Industrial Policy for Delhi: 2010–2021. New Delhi: Department of Industries, Government of National Capital Territory of Delhi.

Mukhopadhyay, P. (2011). Formality and functionality in Indian cities, Seminar, 617, 2-8.

Sharma, S. & Kunduri, E.  (2015). ‘Working from home is better than going out to the factories’ (?): Spatial Embeddedness, Agency and Labour-Market Decisions of Women in the City of Delhi, South Asia Multidisciplinary Academic Journal (SAMAJ). https://journals.openedition.org/samaj/3977

About the Wokshop

As part of our initiative to engage with law and policy makers, the Technology and Society Initiative at CPR launched a new series on ‘Navigating Interactions between Technology and Policy’. The focus audience for this initiative are Legislative Assistants to Members of Parliament (LAMP) fellows, parliamentary aides and others directly involved with law and policy making in India. This three-part series of workshops, consisting of talks and presentations by experts from and outside CPR, followed by lively interactions, aims to shed light on current debates pertaining to technology.

The second workshop in this series, with its focus on emerging technologies and related regulatory frameworks, was conducted at the CPR Conference Room on 26th September 2019. The discussion had three segments and was led by key resource persons in the form of individual presentations followed by a round of questions and answers. This was moderated by Ananth Padmanabhan, Visiting Fellow at CPR.

Drone Regulations

To present the perspective of the government on new technologies, Akhilesh Tilotia, a former Officer-on-Special Duty to the Minister of State for Civil Aviation, shed light on the debates around drone regulations in India. Drones or unmanned aerial vehicles (UAVs) have offered wide ranging applications across sectors like agriculture, property surveys, infrastructure management and other beneficial use cases. Every new technology is weighed on the scale of ‘good versus bad’, which is a flawed approach. Policymakers aim towards either minimising the harmful effects and externalities of policy or maximising innovation. In an attempt to save the society from ill-effects, sometimes governments end up throttling genuine businesses and innovators. In most cases, the government initially resorts to a complete ban in the anticipation that industry players would later approach them with the problems that the ban would cause for them, and then seek to address those issues one-by-one. This might not be an appropriate approach but still remains a common practice by governments around the world to attain a realistic and nuanced regulation. Drones, from being under a complete ban are now being regulated through ‘No Permission, No-take off’. The key challenges with drones are that of privacy, safety and security. However, Tilotia referred to the ‘Red Flag Law’ in the early days of the automobile revolution and argued that society does take some time to adapt to new technologies. The government’s response in the form of policies and law is expected to ease the rate of adoption. He also highlighted the importance of shifting the responsibility of intimation to the individuals who are using the technology rather than seeking prior permission from the government before acting further.

E-Commerce Regulations

Advancing a similar line of thought, Arjun Sinha, a legal and policy consultant to multiple e-commerce businesses, provided an overview of the e-commerce regulations in India. The definition of e-commerce encompasses, ‘buying and selling of goods and services including digital products over digital and electronic network’. According to this definition not all internet platforms classify as e-commerce businesses. Out of the prominent examples like Uber, Flipkart, Urban Clap and Urban Ladder, only Flipkart qualifies as an e-commerce company in the conventional sense. Focusing on Foreign Direct Investment (FDI) norms and parallel developments at the World Trade Organisation (WTO), he traced the history of e-commerce policy and regulation in India. In January 2019, the Department of Industrial Policy and Promotion (DIPP) reiterated that FDI in multi brand retail was prohibited in an inventory-based e-commerce model. In 1997, the wholesale trading (cash and carry) was executed 100% through the government route. In 2006, cash and carry retail was partly permitted under automatic route. In 2007, Flipkart was launched in India and by then online trade was already being viewed as a win-win situation for all the stakeholders: consumers, traders and the government. A global moratorium on customs duties over electronic transmissions was already in place, following which the 11th Ministerial Conference of the WTO held in Buenos Aires in 2016 advanced a proposal to make this moratorium permanent. This proposal had the opposite effect, compelling India to develop a nationalistic vision on the subject, reflected in a draft e-commerce policy that was leaked in 2018. Though withdrawn later, a subsequent draft also proposes bringing e-commerce business platforms under higher scrutiny particularly on themes like consumer protection and taxation. Key issues such as data localisation and data sharing with customers and vendors also found presence here. Press note 2 of 2018 has raised new operational barriers on digital platforms. A report by the Finance ministry was published on taxation of internet companies and the issue is being discussed globally. However, there is no domestic e-commerce law in sight yet.

Cryptocurrency Regulations

Shantanu Sharma, President of Blockchain Chamber of Commerce (India Chapter), spoke next, addressing the regulatory issues surrounding blockchain technology, bitcoins and cryptocurrencies. An Inter-Ministerial Committee of the Government of India has recently published a report along with a draft bill, recommending a ban on cryptocurrencies. This ban bears striking resemblance to the early action taken against civilian drones by the Directorate General of Civil Aviation in 2014. Interspersed with technical details, Sharma’s presentation highlighted the areas of concern for governments when it came to this technology. However, the technology has immense benefits too. Markets are dominated by technology leaders who shape and control the digital and internet architecture. This has the effect of furthering the centralisation of data and network power, and stifling competition. Decentralisation, serving as a counter-weight to this trend, is at the heart of blockchain technology. This technology essentially replaces a ‘third-party trusted intermediary’ with mathematical proof of the transaction that is verifiable by all actors without reliance on such intermediary. Bitcoin, in the words of its creator Satoshi Nakamoto, is  ‘purely peer-to-peer version of electronic cash which would allow online payments to be sent directly from one party to another without going through a financial institution.’

Conclusion

In conclusion, all speakers laid emphasis on the need to move away from knee-jerk bans on emerging technologies to formulating a principle-based framework which can efficiently regulate unpredictable innovations.

Highlights of the first workshop of the series on Privacy in the Times of Live, Constant and Mass Data Processing can be read here.

By Ananth Padmanabhan

Technology has significantly driven India’s growth over the past decade. Be it the rise of well-funded startups and ‘unicorns’, the imaginative use of technology for governance, or the emergence of India as a hub for R&D activity and a test bed for product innovation, technology is an important driver for growth in India. A 2018 report by the Startup India Initiative states: ‘The ecosystem comprises of over 14,600+ Startups, approximately 270 incubation & business acceleration programs, 200 global & domestic VC firms supporting homegrown Startups, and a fast-growing community of 231 angel investors and 8 angel networks. India also boasts of being home to the 3rd largest unicorn community, with over 16 high valued Startups having raised over $17.27 billion funding, with overall valuation of over $58 billion.’¹

But with this exponential growth comes a set of policy and regulatory challenges. First, government policy and the regulatory framework need to be aligned to enable the growth of a robust technological ecosystem, rather than impede it. The global competition for leadership positions in emerging technology domains, such as artificial intelligence, drones, gene editing and other areas, has become aggressive, with China becoming a lead contender. This global race demands impactful innovation policies that ease up creative and inventive activity, but in a responsible manner.

Second, as various incidents post 2016 demonstrate, the rise of the digital has created new vulnerabilities and new types of harm to individual and group rights. A digitally connected ecosystem is rife with security concerns, which are exacerbated when digital literacy does not keep pace with digital use. Moreover, with personal data becoming a critical tool for monetization and profiling, the incentive for both industry actors and the state to secure such data and respect individual privacy is quite low. Both the Facebook–Cambridge Analytica controversy and the unrestricted seeding of Aadhaar data in multiple databases to build a 360-degree view of citizens indicate distinctive kinds of threats to individual and community rights. Therefore, respect for privacy and individual/community rights must be externally imposed, with regulations playing a part in this process.² In short, developing an indigenous regulatory framework for new technologies is a pressing need for India. Three central principles are integral to this transition.

Three Central Principles

The first principle for regulators and policymakers to bear in mind is clear identification of the problem that regulation must address. While this is not unique to the technology context, there are a few specificities in this field that make this principle worth emphasizing. Often, technological change affects sectors that are under an existing regulatory apparatus, as seen in the case of online cab aggregators or food delivery services. When regulators attempt to transplant this apparatus to a new factual reality, a common mistake is to assume that regulations must address the same set of problems as witnessed in the earlier non-tech scenario. But in doing so, the regulatory response addresses more problems than required, because technology-enabled models are likely to sort out at least some concerns.³ This response also presents the danger of under-inclusion as new challenges raised by technology-based models may be missed in the process. Therefore, it is imperative to clearly identify surviving and new problems caused by technology, separate those that demand immediate regulatory attention from others that may only require a wait-and-see approach, and then develop targeted regulatory and monitoring strategies for each of these concerns.

For instance, the draft e-commerce policy released for discussion in 2019 defines ‘e-commerce’ as including ‘buying, selling, marketing or distribution of (i) goods, including digital products and (ii) services; through electronic network’. Evidently, this is an extremely wide definition that brings within regulatory control a wide range of activities from online retail to app-based health delivery. The document also attempts to outline policy for a host of different problems: data; infrastructure development; e-commerce marketplace regulations such as anti-counterfeiting, anti-piracy and foreign direct investment; consumer protection; payment related issues; export promotion; and content liability exemption, among others. The concerns of social media are far removed from fashion retail, and consumer woes pertaining to online travel booking differ vastly from digital health solutions.⁴ The unfortunate result is a heavily diluted effort that portends regulatory overreach. To avoid this in the future, regulatory approach must shift course from deciding in advance the range of business activities that need regulation to identifying the specific problems that proposed regulations must address, under the first principle discussed above. Inability to do so would only cause apprehension and uncertainty for businesses, and extremely ineffective and diluted protection for citizens.

The second principle is to prioritize a risk-based and responsive regulatory approach. When regulating unfamiliar territory, as is mostly the case with new technologies, proclivities to entirely ban an activity or create restrictive pre-activity licensing models are high. The bureaucratic instinct to play safe and apply a ‘precautionary principle’ comes at the cost of innovation and entrepreneurship.⁵ Moreover, because many new technologies have cross-cutting impact, even these decisions are taken in silos with one agency or regulator taking a more pro-technology view while another acts more restrictively.

The changing stance on data localization in India suffers from failure to adopt such a risk-based approach. At the heart of this debate is whether private entities must be compelled to store the data of Indian citizens in servers located within India. A compelling rationale offered in support of this measure is that law enforcement officials find it difficult to investigate criminal misconduct when data resides in servers located elsewhere. Another rationale offered is the threat to national security because of the possibility that foreign governments can spy on Indian citizens, taking advantage of the fact that their data resides in servers within their jurisdictions. A third rationale argues that localization can help advance a domestic artificial intelligence and data ecosystem, as done by China previously.⁶ But amidst these multiple narratives, there is no clear study from the Government of India or any of the regulators about the extent of harm caused because of servers residing outside India, the less restrictive measures that could equally address any of these concerns.

To address these concerns, the regulation of emerging technologies should be risk-based and responsive. This new approach involves detecting undesirable or non-compliant behaviour, responding to that behaviour by developing tools and strategies, enforcing those tools and strategies on the ground, assessing their success or failure, and modifying approaches accordingly.⁷ By valuing these processes, the overall approach towards regulation changes in an organic manner. Risk assessment involves multi-stakeholder conversations and an engagement with data that goes beyond projected fears and growth narratives. It entails creating a mechanism meant to gather the requisite information, including engagement with technical bodies. Finally, it also brings about some consensus among different regulatory bodies regarding the kind of enquiry involved, if not the answers to such enquiry. A healthy debate on the risks surrounding a new technology is essential for the creation of a proportionate regulatory framework that balances innovation and protection effectively.

The third principle is to value democratic principles and fundamental rights. The rise of the Internet and digital technologies has resulted in a loss of traditional state power and authority, leading to reassertion of control on the part of the bureaucracy. This reassertion now presents itself in the form of various regulatory controls such as demands to keep the privacy baseline low so that the state can easily access private communications, attempts to monitor online speech and to impose criminal and civil liabilities upon those expressing unpopular or undesirable views, and restrictive business requirements on private actors such as data localization. These controls, increasingly justified on the basis that China has relied on similar interventions to successfully build its innovation ecosystem, carry extremely harmful consequences for the future of democracy in India.

While many of governmental interventions do not come from a place of mala fide intent, it is important to be reminded often, as a polity, and especially so for policymakers and regulators, that India is built on a foundation of democratic values and crucial constitutional safeguards. As our experience with Section 66A of the Information Technology Act, 2000 – subsequently struck down by the Supreme Court in Shreya Singhal v. Union of India⁸ – demonstrates, the impetus to regulate online behaviour or technological innovation should not emanate from a deep-seated desire to command and control. Such a desire is likely to result in unconstitutional behaviour and impermissible inroads into the fundamental rights of citizens, including free speech and expression and the freedom to do business. While realities such as the virality of fake news in the age of social media raise serious concerns, responses cannot be built on the assumption that a strong state (like China) can put a stop to these concerns. Moreover, often responses of this kind change the very dynamic of citizen-state engagement in a democracy, leading to possible misuse and a surveillance architecture that evokes fear.

Recommendations

The regulatory interventions coinciding with India’s period of technology-led growth have been a mixed bag. Privacy may have found its ally in the Indian Supreme Court, but the data protection bill has long been in the works without much-needed push from the government to formalize it as a legislation.⁹ Moreover, many of the safeguards against misuse of Aadhaar data, emphasized by the Supreme Court when upholding the validity of the Aadhaar Act, have been watered down through a recent ordinance that bypassed legislative scrutiny.¹⁰ The data localization debates reveal uncoordinated action between different power centres within the government, resulting in both business unpredictability and the fear of censorship through architectural changes to the Internet. Recent proposals in the realms of e-commerce and intermediary liabilities do not indicate well-thought-out measures of regulation that factor in the capacity for enforcement, the impact on fundamental freedoms including speech and business autonomy, or the proportionality of state action.¹¹

Yet, there have been some green shoots as well. The drone policy is one such, coming as it did from a place of outright ban on the technology in 2014 to a state-of-the-art reg-tech solutions like Digital Sky and Regulations 1.0, in 2018, that leave room for further iterations that match the pace of technological advances in this sector.¹² The Telecom Regulatory Authority of India’s position on net neutrality has been largely well received across the range of different stakeholders. On digital payments, the government has displayed considerable sensitivity towards various concerns ranging from innovation in the sector to consumer dispute redressal mechanisms and competition concerns. In all these cases, what comes through is some degree of mindfulness to the central principles outlined here. The government should now build on these early successes to develop appropriate regulatory toolkits.

Any regulatory intervention in the field of technology policy must begin with an insistence on a clear outlining of the harms involved and a mapping of the various alternate policy measures that could be potentially taken to address these harms. This is a good starting point for citizens and other stakeholders to develop awareness of the challenges that the state wishes to address, and the fit between these challenges and the proposed regulatory measures. The European Union has insisted on similar measures as part of its ‘Better Regulation’ principles.¹³ The responsibility cast on the regulator to explain why it is regulating in the manner it proposes can make a significant contribution towards providing certainty, accountability and curbs on arbitrary intervention.

Regulation of new technologies should also enable experimentation with bespoke regulatory approaches and tools, as well as with innovative market solutions, both in a contained low-risk environment. ‘Experimental regulation’ seeks to achieve this objective by providing exceptions to, or exemptions from, existing regulation in a ring-fenced environment.¹⁴ In many countries, experimental regulation has taken the form of sandboxing schemes. The UK Financial Conduct Authority’s Project Innovate is a live example of regulatory sandboxing for financial technologies. Other jurisdictions such as Australia, Singapore, Switzerland, Hong Kong, Thailand, Abu Dhabi and Malaysia have also been experimenting with similar initiatives.¹⁵ India needs to create more comprehensive thinking across multiple regulators about the efficacy and modalities of such regulatory sandboxes.

As many of the new technologies cannot be confined in clear terms to the regulatory jurisdiction of any one regulator, India also needs to develop strategies for better inter-agency coordination. The data localization controversy revealed how different regulatory and recommendatory bodies were at odds with each other on how to address this issue. Because data is a cross-cutting asset across multiple sectors, it is imperative to build better coordination and some uniformity in decision-making on matters of data governance. In the US, the Obama administration had created an Emerging Technologies Interagency Policy Coordination Committee to tackle the problem of siloed decision-making. Israel has established an inter-agency team to coordinate regulation of virtual assets. India must learn from these exercises and build a more coordinated regulatory strategy for data governance as well as other realms of new technology.

Finally, important regulatory interventions should also carry the mandatory requirement of a rights impact assessment. The current relationship between regulators and civil society is mostly one of direct acrimony and distrust, especially when it comes to regulating the Internet and digital technologies. The only way to usher in a structured change is to mandate a clear rights impact assessment, where the regulator must necessarily gauge the implications of the proposed regulatory approach on fundamental and human rights. Many instances of excessive and harsh regulations can be pre-empted at an early stage if this mechanism is built into the regulatory process.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

• The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States by Nimmi Kurian
• Rethinking India’s Approach to International and Domestic Climate Policy by Navroz K Dubash and Lavanya Rajamani
• India’s Foreign Policy in an Uncertain World by Shyam Saran
• Need for a Comprehensive National Security Strategy by Shyam Saran
• A Clarion Call for Just Jobs: Addressing the Nation’s Employment Crisis by Sabina Dewan
• Time for Disruptive Foreign and National Security Policies by Bharat Karnad
• Multiply Urban ‘Growth Engines’, Encourage Migration to Reboot Economy by Mukta Naik
• Schooling is not Learning by Yamini Aiyar
• Clearing Our Air of Pollution: A Road Map for the Next Five Years by Santosh Harish, Shibani Ghosh and Navroz K Dubash
• Protecting Water while Providing Water to All: Need for Enabling Legislations by Philippe Cullet
• Interstate River Water Governance: Shift focus from conflict resolution to enabling cooperation by Srinivas Chokkakula
• Managing India-China Relations in a Changing Neighbourhood by Zorawar Daulet Singh
• Beyond Poles and Wires: How to Keep the Electrons Flowing? by Ashwini K Swain and Navroz K Dubash
• Regulatory Reforms to Address Environmental Non-Compliance by Manju Menon and Kanchi Kohli
• The Numbers Game: Suggestions for Improving School Education Data by Kiran Bhatty
• Safe and Dignified Sanitation Work: India’s Foremost Sanitation Challenge by Arkaja Singh and Shubhagato Dasgupta
• Safeguarding the Fragile Ecology of the Himalayas by Shyam Saran
• Female Labour Force Participation: Asking Better Questions by Neelanjan Sircar
• Towards ‘Cooperative’ Social Policy Financing in India by Avani Kapur
• Understanding Land Conflict in India and Suggestions for Reform by Namita Wahi

¹ ‘States’ Startup Ranking 2018’ (New Delhi: Department of Industrial Policy & Promotion, 2018), 7-8,  https://www.startupindia.gov.in/content/dam/invest-india/compendium/Star….
² Alvin Chang, ‘The Facebook and Cambridge Analytica Scandal, explained with a simple diagram’, Vox, 2 May 2018, https://www.vox.com/policy-and-politics/2018/3/23/17151916/facebook-camb… Rachna Khaira et al., ‘UIDAI’s Aadhaar software hacked, ID database compromised, experts confirm’, Huffington Post (11 September 2018), https://www.huffingtonpost.in/2018/09/11/uidai-s-aadhaar-software-hacked….
³ Ryan Hagemann, ‘A regulatory framework for emerging technologies’, 1776, 16 March 2016, athttps://www.1776.vc/insights/regulation-emerging-technology-government-d….
⁴ See Ananth Padmanabhan and Arjun Sinha, ‘White Paper on Regulating E-Commerce in India: Need for a Principles-based Approach’ (New Delhi: Centre for Policy Research, 2019), http://www.cprindia.org/research/reports/white-paper-regulating-e-commer….
⁵ Darcy Allen and Chris Berg, ‘Regulation and Technological Change’, in Australia’s Red Tape Crisis, edited by Darcy Allen and Chris Berg, 218, 226-227 (Queensland, AU: Connor Court Publishing, 2018).
⁶ Compare, in this regard, the Reserve Bank of India Directive RBI/2017-18/153 dated 6 April 2018 with the draft National E-Commerce Policy.
⁷ Julia Black and Robert Baldwin, ‘Really Responsive Risk-based Regulation’, Law & Policy 32(2) (2010): 181.
⁸ (2015) 5 SCC 1.
⁹ K.S. Puttaswamy v. Union of India (2017) 10 SCC 1; Surabhi Agarwal, ‘Personal Data Protection Bill only after new government takes over’, Economic Times, 4 January 2019, https://economictimes.indiatimes.com/tech/internet/personal-data-protect….
¹⁰ K.S. Puttaswamy v. Union of India (2019) 1 SCC 1; Zaheer Merchant, ‘Supreme Court refuses to entertain challenge to Aadhaar ordinance, tells petitioners to approach High Court’, Medianama, 8 April 2019, https://www.medianama.com/2019/04/223-supreme-court-refuses-to-entertain….
¹¹ See ‘Draft National E-Commerce Policy: India’s Data for India’s Development’ (New Delhi: Department of Industrial Policy and Promotion, 2019), https://dipp.gov.in/sites/default/files/DraftNational_e-commerce_Policy_… ‘Draft Information Technology [Intermediaries Guidelines (Amendment) Rules], 2018’ (New Delhi: Ministry of Electronics and Information Technology, 2018), https://meity.gov.in/writereaddata/files/Draft_Intermediary_Amendment_24….
¹² ‘Civil Aviation Requirements’, Series X, Part I, Issue I: Requirements for Operation of Civil Remotely Piloted Aircraft System (RPAS), F. No. 05-13/2014-AED Vol. IV (New Delhi: Directorate General of Civil Aviation, 2018), http://dgca.nic.in/cars/d3x-x1.pdf.
¹³ ‘Better Regulation Toolbox’ (European Commission, 2017), http://ec.europa.eu/smart-regulation/guidelines/docs/br_toolbox_en.pdf.
¹⁴ Sofia Ranchordas, ‘Innovation-Friendly Regulation: The Sunset of Regulation, The Sunrise of Innovation’, Jurimetrics 201 (2015): 55.
¹⁵ Regulatory Sandbox: Making India a Global Fintech Hub (Deloitte, 2017), available at https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-m….

By Manju Menon and Kanchi Kohli

In India, industrial, energy and infrastructural projects are legally mandated to seek environmental approvals under a range of central and state level laws such as the Environment Protection Act, 1986, Air (Prevention and Control of Pollution) Act, 1981, Water Prevention and Control of Pollution Act, 1981, and the Forest Conservation Act, 1980. Project approvals under these laws include environment and social safeguards or ‘conditions’, such as reducing the pollution load due to project operations, reforestation to make up for forest loss, and prohibition or limits on groundwater extraction. Projects are expected to comply with these safeguards during construction and through the period of operations. In case of mining projects, backfilling and ecological restoration of the land also form part of the safeguards. In effect, the purpose of conditional project approvals is to minimize and mitigate environmental and social harms caused by large projects.

During the first four decades of implementation of India’s post-independence environmental laws, there was little or no emphasis on the status of compliance with conditions by projects. The focus was on the needs of the economy and national development on the one hand, and on the other hand, the social conflicts caused by land displacement. Even though legal clauses related to environmental compliance existed in these laws, projects operated with impunity, causing widespread degradation of the environment.

It is only in the last decade that environmental non-compliance by projects and the inability of existing institutions to enforce laws have come under the scanner. Since 2010, the office of the Comptroller and Auditor General (CAG) has produced environmental audit reports and reported on non-compliance. The courts have observed large-scale legal violations in specific sectors such as mining. Non-governmental studies have also recorded high rates of non-compliance.

Unable to brush the problem under the proverbial carpet, the government engaged in a series of hurriedly thought out mechanisms to deal with it. These include:

• Self-regulation through the use of pollution monitors or devices to capture and relay information on pollution and other performance indicators directly to pollution control board authorities
• Provisions for penalties, fines, bank guarantees and other financial disincentives based on the ‘polluter pays’ principle
• One-time amnesty schemes to violating projects and grant of short-term or temporary approvals to violators in an effort to bring them into compliance

But these measures have neither improved environmental performance of projects nor stemmed the flow of complaints and legal cases by affected people against polluting projects.

Why Should Compliance Be Addressed Urgently?

Robust and well-thought-out environmental compliance mechanisms are hardly seen as a necessity for India’s development. In fact, governments have approached the idea of regulating projects as a liability and a drag on economic growth. They have been slow to implement existing regulations and selective enforcement has earned them the reputation of creating a ‘license raj’. This can be seen in the Supreme Court’s ongoing efforts to enforce the mandatory emission standards on coal power plants. Even though the standards have existed for several years as part of the consent permits issued under Air and Water Acts, the central government systematically dragged its feet on getting projects to comply with the norms.

Today, the impacts of unregulated projects have made it politically unfeasible for governments to ignore their effects on the economy and on people. The recent conflict due to the operations and proposed expansion of the Sterlite Copper Smelter in Tamil Nadu is a case in point.¹ The project was India’s largest copper production plant but also causing toxic emissions, soil and water pollution. Despite numerous complaints and legal cases against the project’s pollution, the company was allowed to continue its operations for 20 years. Last year, when the company sought permissions to expand its operations, there were massive local protests for over 100 days; they finally turned violent when the local police shot down 13 protestors. Sterlite also became a political flashpoint with the opposition party making it an important issue in their 2019 election campaign in the state.

There are numerous cases that are being litigated in court for non-compliance with environmental safeguards. These have resulted in huge financial implications for projects and for related economic sectors as a whole. The Goa mining case led to the total state-wide ban on mining since 2012. The National Green Tribunal imposed penalties of over INR 873 crores as fines for environmental violations in the first quarter of 2019 – an amount that is close to the total fines imposed last year.

Poor compliance causes critical environmental blowbacks in the form of severe water shortages, productivity losses and toxic air. While these conditions have been building up in most parts of the country, climate change dynamics add to these local conditions, making their impacts far more acute and complex. For example, areas already affected by large-scale water extraction for industrial purposes, coal washeries and thermal power plants could also face frequent and more lasting droughts. The visible effects of environmental impacts in eroding the positive gains of development have already caused a shift in mainstream economic thinking that traditionally ignored the economic cost of degraded and damaged habitats. It is accepted that crisis management is hardly possible any more, and that there is a need to plan reforms and strategies for economic and environmental transformation. Environmental compliance systems will form a key part of these reforms.

The case for compliance as a bulwark of environmental regulation has never been more compelling than in the time of climate change. So far, the success or failure of compliance has revolved around the compulsions of domestic politics, but it is now tied to the geopolitics of climate change. After years of wrangling over who should do what to check global warming, nations finally thrashed out the Paris Agreement, which obliges every signatory to put in place, by 2020, a set of measures to meet their respective carbon mitigation targets. However, without a systemic and robust protocol to ensure compliance, India runs the risk of falling short of its targets. Therefore, it is imperative, not to mention politically expedient, for the political party coming to power after the 2019 general elections to set up, in the first place, a credible and effective mechanism of compliance with domestic regulations before it goes about honouring its Paris commitments.

Who Should Regulate Projects and How 

Successive governments have emphasized the quantitative aspects of economic growth. They have focused on increasing the number of projects approved during their tenure and reducing the time needed for impact assessment and granting approvals. These projects have been accompanied by severe impacts as pollution and environmental degradation are viewed as the trade-off for growth. However, with over 16,000 centrally approved large projects operational and several others promised or in the pipeline, the scale of the problem has today expanded exponentially in both industrial and ‘greenfield’ or less industrialized areas. The government can neither ignore nor delay tackling this problem. Compliance with environmental and social safeguards is a necessary if not sufficient condition to improve the quality of our economy’s growth. The question, therefore, before the new government, will no longer be ‘if’ projects need to be regulated but of how to regulate and who will regulate. Given below are three sets of policy reforms with the potential to shift the government’s approach to the problem of environmental compliance of projects and achieve better results.

Compliance-based approvals

Agencies implementing environmental laws view the procedures for grant of approvals as linear systems rather than cyclical ones. This problem is best illustrated by the number of flowcharts put out by them explaining these procedures. Compliance comes downstream in these processes and there is little room for feedback. Project performances on compliance almost never influence government decisions on project expansions, extensions or applications for permission by violating companies to set up projects in new areas. For example, the Kulda opencast mine operated by Mahanadi Coalfields in Sundargarh district of Odisha has violated several conditions of its approvals. Yet, it received approval for expansion and capacity addition twice in two years, for a period of one year each. The validity of environment clearances for mining projects is otherwise 30 years. This decision of the Expert Appraisal Committee (EAC) set up under the Environment Impact Assessment (EIA) notification, 2006, to review such projects was ad hoc, with no precedence and legal basis.

The lack of systemic mechanisms to address non-compliance in recent years has also created huge pressure on the bureaucracy to show legal compliance without affecting the financial status of ongoing operations. For this they have offered one-time amnesty to violating projects under the EIA, Coastal Regulation Zone and biodiversity laws. But these measures only improve the record of compliance on paper and not in reality.  Now with so many projects already operational, it is crucial to place a very high bar on projects being granted approvals. The basis of regulatory procedures should shift from approvals to compliance. Only those projects that have an established record of high compliance or which can surpass the compliance performance of others in the field, and certainly meet the legal standards, should be granted permits and approvals. The permissible standards for pollution are already pending major reforms. But these changes will prove futile if projects are not held to the highest compliance standards.

Third-party monitoring

The present practice of monitoring a project’s compliance in effect involves two parties: the project proponent and the regulatory authority. This system has so far not been able to address the problem of non-compliance and has instead led to concerns of collusion and corruption. A review of this practice has resulted in recommendations that monitoring should be done by an independent third party. The environment ministry proposed an amendment to the EIA notification in September 2018 to include this recommendation. This is yet to be finalized. The ‘third party’ proposed in this amendment is expert government institutions.

In reality, the genuine ‘third party’ in this context is the communities who experience effects of non-compliance such as loss of livelihoods, poor living conditions and displacement. Although they have the greatest stake in remedying the damages caused by non-compliance, they are nowhere in the picture when project monitoring is done. This is contradictory to the participatory turn in environmental governance in several countries since the 1970s and the constitutional mandate for it in India. Data from our research on cases of environmental non-compliance in four states shows that when communities have been involved in collection of evidence, reporting of violations and official monitoring by regulators, environmental compliance can improve significantly. Their participation also helps regulators understand community priorities for remedial actions. Regulatory bodies in these states are beginning to recognize the benefits of community participation and are more open to including communities in procedures such as site visits conducted by them for monitoring. But practices that foster community participation ¬– such as social audits of projects (which provide access to monitoring data and formal spaces for interaction with affected people) – are yet to be systematized in environment regulation.

Integrated regional networks for compliance

India’s environment regulations have largely been implemented with a project-centric approach. Approvals are granted to projects after their impact studies, cost-benefit analysis and environment management plans are assessed by regulatory bodies. These assessments routinely understate the potential impacts of projects, making them seem benign or operations whose impacts can be easily mitigated. Such assessments also generate quicker approvals from regulatory bodies, thus helping to meet the government’s economic growth targets. For long, activists and experts have demanded cumulative impact studies so that the full range of project impacts can be ascertained prior to the grant of approvals. But such comprehensive studies have been done only in a few cases. Cumulative studies are needed not just at project levels but also for regions that are affected by environmental degradation.

Similarly, a project-based monitoring system is resource intensive and not very effective in terms of the overall outcomes. But if regulators could be reorganized as integrated regional networks, they could use the resources available to them more efficiently to improve environmental standards regionally. Multiple regulatory agencies within the concerned region could pool their expertise and human resources towards coordinated responses. Such a mechanism can bring an inter-displinary approach to compliance monitoring. The regions identified for such integration could cut across administrative boundaries such as districts or states. It could be at the level of large industrial sites like Special Economic Zones (SEZs) with multiple projects operating within them, metropolitan regions, entire districts or geographical regions already identified as critically polluted, or entire airsheds or river basins.

Although envisaged by law, such a regional approach to environmental governance has only been used in a few cases. It has been used in emergency responses to environmental pollution, such as the moratorium on industrial activity in Vapi, Gujarat, or the ban on mining in Goa. But a regional approach to systematically  improve post-approval compliance of projects has not been envisaged. This is mainly because compliance with safeguards has rarely been the focus of regulation and institutional reforms to improve environmental compliance have never been on the government agenda. The ministry could develop pilots to understand the optimum scale at which such integrated compliance networks could deliver the most effective results. Given that the scale of the effects of non-compliance is such that they are no longer restricted to project areas, a regional approach is needed to improve the outcomes of regulation.

Conclusion

Environmental compliance is a critical part of environment regulation. While regulatory actions have prioritized economic growth for several decades, the costs of environmental degradation due to industrial and developmental projects are no longer possible to ignore. These issues have become politically and economically salient in recent years. This paper makes three sets of recommendations for how environment regulation can approach the issue of persistent and pervasive non- compliance by projects. These reforms are critical to avoid the costly and harmful disruptions of development.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

• The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States by Nimmi Kurian
• Rethinking India’s Approach to International and Domestic Climate Policy by Navroz K Dubash and Lavanya Rajamani
• India’s Foreign Policy in an Uncertain World by Shyam Saran
• Need for a Comprehensive National Security Strategy by Shyam Saran
• A Clarion Call for Just Jobs: Addressing the Nation’s Employment Crisis by Sabina Dewan
• Time for Disruptive Foreign and National Security Policies by Bharat Karnad
• Multiply Urban ‘Growth Engines’, Encourage Migration to Reboot Economy by Mukta Naik
• Schooling is not Learning by Yamini Aiyar
• Clearing Our Air of Pollution: A Road Map for the Next Five Years by Santosh Harish, Shibani Ghosh and Navroz K Dubash
• Protecting Water while Providing Water to All: Need for Enabling Legislations by Philippe Cullet
• Interstate River Water Governance: Shift focus from conflict resolution to enabling cooperation by Srinivas Chokkakula
• Managing India-China Relations in a Changing Neighbourhood by Zorawar Daulet Singh
• Beyond Poles and Wires: How to Keep the Electrons Flowing? by Ashwini K Swain and Navroz K Dubash
• The Numbers Game: Suggestions for Improving School Education Data by Kiran Bhatty

Ramaswamy Iyer, Honorary Research Professor at CPR, passed away on 9 September. Amita Baviskar from the Institute of Economic Growth, and R Umamaheshwari, Fellow at the Indian Institute of Advanced Study, among others, recall his contributions to research and policy.

• In He Watered the Arid Fields of Administration with Intellectual Rigour and Honesty, Amita Baviskar comments on Iyer’s contribution to India’s water issues.
• R Umamaheshwari writes in A visionary on water issues how Iyer ‘saw rivers as inextricable parts of the lives of communities’.
• Nitin Sethi writes on why Ramaswamy Iyer was Not your typical bureaurcrat.
• Countercurrents shares the transcript of a talk Iyer gave to the Association for India’s Development (AID) volunteers in January, 1999.

In one of the worst terror strikes in the state of Jammu and Kashmir since the Uri attack, around 44 CRPF personnel were killed and several others injured after a terrorist rammed an explosive-laden vehicle into a bus in the state’s Pulwama region. The Jaish-e-Mohammed (JeM) based in Pakistan claimed responsibility for the attack. The attack raises pertinent concerns about the deteriorating security situation in the Valley, India’s relationship with Pakistan, and the country’s national security framework. In this curated media commentary below, CPR faculty analyse and comment on the Pulwama terror attack.

• Ambassador Shyam Saran writes in Indian Express that ‘the deteriorating security situation in the Kashmir Valley cannot be delinked from the abdication of political responsibility by successive governments in Delhi.’ He underscores the need for political parties to ‘not engage in a high-decibel blame game’ and ‘come together to deal with what is a festering wound, which could spread its toxin in the entire body politic.’ In ‘The Tribune’, Amb. Saran highlights the need for ‘a national security strategy which could guide the State (India) in dealing with crisis situations as well as longer-term challenges.’ Even more important, he writes, ‘is crafting a longer-term strategy which locates the pursuit of national security in the overall national endeavour encompassing domestic, external and military security, economic and ecological security and strategic communications.’
• In ‘Firstpost’, Bharat Karnad lays out ways in which India should deal with terror outfits like JeM. In ‘Bloomberg Quint’, Karnad stresses that India must solve the problem of Pakistan-sourced terrorism by itself. He highlights that ‘the overlapping of US and Chinese interests means Pakistan is immune to any external pressure that Delhi is able to mobilise and, in any case, can continue prosecuting its covert war in Kashmir using terrorist proxies.’
• In the ‘Hindustan Times’, Brahma Chellaney writes about China’s culpability in the Pulwama attacks. He highlights how ‘in keeping with its master plan, Beijing brazenly shields Pakistan’s export of terrorism, including blocking UN action against Pakistan-based terrorists like Masood Azhar.’ He calls for a ‘clear-headed and self-assured foreign policy, particularly for addressing the insidious China challenge.’ In another interview with ‘ET Now’, he discusses various diplomatic and economic ways to pressurise and isolate Pakistan, including downgrading the diplomatic relationship with the country.
• G Parthasarathy, in an interview with ‘NDTV’, talks about how ‘Pakistan is the prime Chinese instrument for low-cost containment of India’. He stresses on the need for clear, long-term policies to deal with Pakistan, including working with Afghanistan and Iran. Parthasarathy also appeared in an interview on ‘DDNews’, where he called for building economic pressure on Pakistan through the International Monetary Fund (IMF), World Bank and the Asian Development Bank.

By Navroz K Dubash and Lavanya Rajamani

India has traditionally approached climate change as a diplomatic issue, insisting that the developed world – because of their disproportionate role in causing the problem – should lead the way in reducing emissions, and provide the developing world the finance and technology to do so. While this approach is entirely justifiable and has served India well in the past, there are compelling reasons for the country to rethink its approach to international and domestic climate policy. First, climate change is likely to have profound and devastating impacts in India, impacts that will make the task of development and poverty eradication considerably harder. Second, there are several cost-effective actions that India can take that serve its development as well as climate interests. Rethinking our approach would translate internationally into our joining, even leading, a ‘coalition of the willing’ that advocates for an ambitious and strong rules-based global climate regime. Domestically, it would translate into a proactive exploration of lower-carbon opportunities for growth that foster development, while investing in climate adaptation and resilience. Rethinking our approach at the international and domestic levels, however, calls for strong institutions for climate governance.

This paper, after a brief context setting section, lays out elements of an approach to international and domestic climate policy that is likely to serve India well in the long run.

Context

Climate change, often characterized as the ‘defining issue of our age’, is predicted to have profound ‘impacts on natural and human systems on all continents and across the oceans.’¹ These impacts are likely to cause devastation in India, a country with 7500 km of coastline, extensive tracts of low-lying areas, high population density, poor infrastructure and continued reliance on agriculture for livelihoods. With the 1°C warming that has already occurred since pre-industrial times, Himalayan glaciers have begun to retreat, and there has been a marked increase in the frequency and intensity of heat waves,²  droughts, extreme rainfall events³  and floods. If the world warms to between 2.6°C and 3.2°C, as the UN climate secretariat estimates it will based on current country pledges, this will have serious, pervasive and irreversible consequences for India – not just in terms of impacts on peoples and ecosystems, but also on economic growth, livelihoods and wellbeing. Climate change is predicted, for instance, to reduce agricultural incomes by 15-25% by the end of the century in India.⁴ 

International Climate Policy

India’s position in the international climate negotiations is set within larger geo-political developments that also inform and influence its broader foreign and energy policy. With the US retreat from the Paris Agreement, the Brazilian President Bolsonaro’s equivocation on it, and the defeat of the Labour Party in Australia which advocated strong climate measures, the momentum that led to the Paris Agreement has begun to dissipate. There is a leadership and imagination vacuum in global climate politics, which India could seek to fill.

For example, India could reach out to China, which has long been its negotiating partner in retaining differentiated responsibility, to forge a mutually beneficial alliance on the global solar energy transition. India leads the International Solar Alliance and provides a substantial market, while China has technological leadership in solar panels and storage technologies. Both countries are involved in the Asia Infrastructure Investment Bank. As the Africa region develops its infrastructure, an India-China alliance could help provide a vision of and the technological and financial means for realizing a low-carbon yet cost-effective future. In addition, and consistent with this approach, India could seek to realize its potential as a leader of vulnerable nations.  Doing so would also be viewed favourably in the South Asia region, by vulnerable countries such as Bangladesh, Bhutan and Nepal. Notably, these measures allow India to be a climate leader even as it takes advantage of opportunities for economic and political gain; that is, they do not require the country to sacrifice economic gain and political position for climate policy.

Based on approaches such as these, India could join forces with others to form part of the ‘coalition of the willing’ in global climate politics. Such a coalition is a particular need at this juncture in the negotiations. With the conclusion of the Paris Rulebook negotiations in Katowice, Poland, in December 2018, the politically charged negotiations on obligations, rules and institutions are at an end, and the regime has shifted gears to the day-to-day business of implementation. The Paris Agreement builds on nationally determined contributions (or NDCs) from countries to reduce greenhouse gases, complemented by a normative expectation of progression and ‘highest possible ambition’ that calls for these contributions to be strengthened over time.⁵  These terms – ‘progression’ and ‘highest possible ambition’ – are not defined either in the Paris Agreement or its Rulebook. Further, while the Rulebook fleshes out informational requirements, and operationalizes an enhanced transparency framework, global stocktake, and implementation and compliance mechanism, it still preserves, out of political necessity, considerable flexibility, autonomy and discretion for states; this is particularly evident in their near-absolute control over the content of their NDC.⁶ States could choose to exploit this discretion and create a political and implementation drag in the process, or they could choose to progressively strengthen their NDCs, enhance the quality of the ex ante and ex post information they provide, and trigger a virtuous cycle of ever ambitious actions necessary to meet the temperature goal of the Paris Agreement. It is in India’s interest to be part of the ‘coalition of the willing’ – nations that seek to progressively strengthen their NDCs, and enhance their ability to meet the procedural requirements of the Paris Agreement and its Rulebook as well as the substantive objective of the climate change regime.

Specifically, first, India should provide information on its NDC, set against the larger context of its development aspirations and resource constraints.⁷ This information should include the planning processes the country has engaged in to reach its NDC, which in turn should include meaningful stakeholder consultations and attentiveness to the human rights impacts of climate change action or inaction.

Second, India should clearly explain how its NDC is fair and ambitious, and on what objective criteria and benchmarks. This approach would allow India to ask how these criteria and benchmarks could be applied to the NDCs of other countries as well, turning its long-held emphasis on the principle of equity in climate change negotiations into a practical and applied measure. It is by providing robust information in the context of its NDC that India can introduce into the global assessment of progress criteria and benchmarks which assess ‘relative fair shares’.

Third, in relation to ex-post tracking of progress in implementing its NDC,⁸  India should identify objective defensible indicators to assess its progress with its NDC, take proactive efforts to address capacity gaps in implementation and reporting, and gradually improve the quality, precision and detail of the information it provides. India’s implementation should demonstrate a high degree of ‘due diligence’ (best possible efforts) in meeting the objectives of its NDC.

Finally, in relation to the global stocktake process every five years,⁹ India should work with negotiating partners (such as South Africa) and vulnerable nations to ensure that the ‘hooks’ on equity in the Paris Agreement and the Rulebook are duly exploited. India should submit its vision of equitable burden sharing and ‘relative fair shares’ to enable a meaningful assessment, albeit a collective one, at the international level of progress towards the global temperature goal.

India’s ability to take a leadership position in this ‘coalition of the willing’ will require a substantial scaling up of the capacity and resources – human, financial, legal, research and institutional – it devotes to engaging in international negotiations, and complementary backchannel processes.¹⁰ The country’s delegations to the climate negotiations are considerably smaller than those of other nations of comparable size and stature. The composition of the delegations tend to favour bureaucrats rather than experts, and there are limited formal channels for national positions to be informed by outputs from the growing research community working in these areas in India. In rethinking our approach to climate policy, international and domestic, India must also rethink its engagement with experts, and the processes for doing so.

Ultimately, the effectiveness of the Paris Agreement, given its hybrid architecture, lies in the strength of the NDCs that parties submit. The strength of the NDCs will in turn depend on international processes that can catalyse more ambitious domestic actions, as well domestic political will and institutional capacity for formulating and delivering ambitious NDCs. It is to these domestic issues that we now turn.

Domestic Climate Policy

As the reality of climate change looms, and its impacts become more real, India – as is true of other countries – increasingly needs to view climate change as a developmental challenge, and not simply as a diplomatic one. Simply put, climate change will make development outcomes more challenging. For example, global pressures to limit greenhouse gases and the emergence of new technologies will make it more complicated for India to power its industries and provide electricity to its citizens in conventional ways. Agriculture, on which a substantial portion of the population still depends for livelihoods, may be particularly hard hit. Cities and coastlines may be subject to disruptions from climate-related events. Water cycles may be disrupted, and the timing and availability of water through rainfall and in India’s rivers may shift. And heat waves and shifting disease vectors will complicate the problem of ensuring public health. Climate change is not an isolated challenge to be addressed by one part of the government; it is a problem that requires mainstreaming of climate considerations through all sections of the government’s decision-making apparatus.

As this discussion suggests, the institutional requirements of managing climate change are considerable. In the last few years, India has begun planning for climate change – including through a National Action Plan, eight national missions covering adaptation and mitigation, and 32 state action plans and greater investment in scientific infrastructure. Yet, a deeper dive into these efforts reveal that the research and analytical capacity in each of these areas is weak, coordination is limited, implementation is patchy across these efforts, and the strategic thinking for truly transformative approaches is lacking.¹¹

Building the capacity of Indian states to address the complex challenges of climate change is but in its infancy. The country needs to go much further down this path, devising and implementing a robust institutional structure that can generate appropriate knowledge, design policy and infrastructure interventions, coordinate across sectoral line departments and across scales of governance, ensure accountability for implementation, and provide an interface to business and civil society groups. Development remains India’s number one priority. But development untouched by climate change is no longer possible. Addressing climate change adds to India’s problem of developing adequate state capacity. A forthcoming edited volume coordinated by the Centre for Policy Research, India in a Warming World, explores how India can truly internalize climate concerns in both its energy consumption and natural resource sectors so as to address climate mitigation and adaptation.

Mitigation

Climate change mitigation, or the limitation of greenhouse gas emissions, has always been tied to India’s global negotiating stance. If wealthier countries, and not India, are largely responsible for the problem, why should India undertake costly mitigation actions? A decade ago, the National Action Plan on Climate Change proposed exploring actions that lead to both development and climate benefits. This principle of ‘co-benefits’ has guided our actions since, but actions that meet this principle have not been fully pursued and developed. Here, India’s status as a late developer is an advantage: we have not, as yet, locked into energy production and consumption patterns, and so can take advantage of new technology and knowledge to build a lower carbon development path.

India’s cities provide a particularly good example.¹² The country is urbanizing rapidly, but much of urban India remains to be built. The next couple of decades afford an opportunity to set up cities where transport needs (and hence emissions but also congestion) are lower due to sensible planning that locates work and living spaces near each other; the travel needs that remain are met increasingly with high-quality public transport and walking (rather than private automobiles); new buildings are designed to need less cooling and heating through intelligent design. Planning processes for urban spaces need to be focused on the multiple objectives that a city should meet in these times – of livability, low congestion, efficient functioning and a small environmental footprint.

India’s electricity system provides another instructive case.¹³ Long ridden with problems of unreliability, poor service and loss-making, Indian electricity is likely to be shaken up by the recent steep decline in costs of renewable electricity to levels where it is competitive with coal power. However, the transition is likely to be turbulent, and create winners and losers. For example, industries may choose to shift to renewables thereby increasing the financial burden on distribution companies. Coal-mining regions may, over time, have to move to other industries.¹⁴

Notably, these changes are inevitable and are being driven by global technology trends, not by national climate policies alone. Recently, Tata Power became the most recent example of a company that is planning to pivot from coal to solar for economic reasons.¹⁵ But planning for this future under the rubric of a transition to a low-carbon economy could help unlock possible synergies between green power, energy access and energy security. Alternatively, failure to plan for this transition may be costly, particularly for the poor. Moreover, the likelihood of green, yet competitive electricity opens the door to electrifying other sectors, such as transportation and cooking. But the challenges involved in managing these transitions, in terms of hardware required, institutional rules and making sure potential losers are not left behind, are substantial and require immediate analysis and planning.

India’s cities and electricity sector are but two examples. Mitigation also encompasses transportation networks (including for freight), industries, agriculture, forest management and use, and food consumption patterns, to name a few. For India, a consistent approach – built around understanding the synergies and trade-offs across multiple development objectives and climate mitigation – needs to become part of the policy framework across these sectors.

Adaptation

It is increasingly clear that despite our best efforts, countries collectively are unlikely to mitigate sufficiently to avoid at least some – potentially significant – effects of climate change.¹⁶ India, perhaps even more than other nations, has to pay considerable attention to the adaptation and resilience of its economy and society.

Doing so is as complex as reducing greenhouse gas emissions, and perhaps even more so. For example, adaptation in agriculture requires preparing India’s agricultural systems for heat stress and unpredictable rainfall patterns against a backdrop of existing farmer distress, a creaky system of price stabilisation prone to rent-seeking, and highly inadequate insurance and risk management mechanisms available to farmers. In this context, large existing entry points into food security and employment, such as the public distribution system and the Mahatma Gandhi National Rural Employment Guarantee programme, could usefully be rethought and repurposed from the perspective of providing climate resilience. In brief, the scale and scope of potential climate impacts require mainstreaming of climate considerations systematically across development programmes, rather than an approach that rests on marginal band-aids.

In another example, India’s long coastline is particularly vulnerable to climate impacts.¹⁷ Climate change is likely to decrease the productivity of fisheries through changes in ocean temperature and acidity levels, already stressed by non-climate effects such as fertiliser run-off, with impacts on livelihoods of fisher communities. Because these effects are non-linear, beyond a point, coastal systems may be stressed beyond the point of recovery. In addition, extreme weather events and sea level rise are likely to reshape coastal zones and increase risks and costs of inhabitation on coasts. Addressing these challenges includes but goes beyond disaster preparedness. It requires, for example, coordinating the work of different departments, some of which have a protective mandate and others that seek to maximize production: these need to be harmonized around coastal resilience.

Apart from agriculture and coasts, urban areas, forests and water management also pose a complex challenge. In all these areas, the challenges of mainstreaming climate change are simultaneously scientific, economic, social and institutional.

Conclusion

As the spectre of climate change grows ever clearer, it is becoming increasingly obvious that pursuing development without internalizing climate change considerations risks ignoring a big piece of the puzzle. A central element of the new government’s agenda must thus be to internalize and mainstream climate considerations.

Fortunately, in relation to international policy, addressing climate change can also bring economic and political gains. It can enable India to work its alliances to become a leader in an impending global clean energy transition. And it opens possibilities for the country to become a political leader, notably of vulnerable nations.

Domestically, there is considerable work to be done. This involves rethinking India’s energy system in a world that prioritizes clean energy, including tackling the thorny question of remaking India’s problematic electricity distribution sector. To manage impacts on agriculture, coasts, cities, water and forests, the new government will need to invest in dedicated scientific and institutional capacity, tasked with internalizing the climate challenge and the implications climate change holds for development.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

• The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States by Nimmi Kurian
• India’s Foreign Policy in an Uncertain World by Shyam Saran
• Need for a Comprehensive National Security Strategy by Shyam Saran
• A Clarion Call for Just Jobs: Addressing the Nation’s Employment Crisis by Sabina Dewan
• Time for Disruptive Foreign and National Security Policies by Bharat Karnad
• Multiply Urban ‘Growth Engines’, Encourage Migration to Reboot Economy by Mukta Naik

¹ Intergovernmental Panel on Climate Change, ‘Summary for Policymakers’, in Climate Change 2014: Synthesis Report, Contribution of Working Groups I, II, and III the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, edited by Core Writing Team, R.K. Pachauri and L.A Meyer (Geneva, Switzerland: IPCC, 2014), 6. [hereinafter IPCC]
² In 2015, a heat wave in India killed more than 2000 people. See Stephane Hallegatte, Adrien Vogt-Schilb, Mook Bangalore and Julie Rozenberg, ‘Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters’ (Washington, DC: World Bank, 2017), 34.
³ O. Hoegh-Guldberg, D. Jacob, M. Taylor, M. Bindi, S. Brown, I. Camilloni, A. Diedhiou, R. Djalante, K.L. Ebi, F. Engelbrecht, J. Guiot, Y. Hijioka, S. Mehrotra, A. Payne, S.I. Seneviratne, A. Thomas, R. Warren and G. Zhou, ‘Impacts of 1.5°C of Global Warming on Natural and Human Systems’, in Global Warming of 1.5°C, edited by V. Masson-Delmotte, P. Zhai, H.O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor and T. Waterfield (Geneva, Switzerland: IPCC, 2018), 263.
⁴ Ministry of Finance, Government of India, ‘Climate, Climate Change, and Agriculture’, in Economic Survey 2017-18 (New Delhi: Government of India, 2018), 82.
⁵ Article 4(3), Paris Agreement, 2015.
⁶ Lavanya Rajamani and Daniel Bodansky, ‘The Paris Rulebook: Balancing Prescriptiveness with Flexibility’, International & Comparative Law Quarterly 68 (4) (forthcoming, 2019).
⁷ Article 4(8), Paris Agreement, 2015.
⁸ Article 13, Paris Agreement, 2015.
⁹ Article 14, Paris Agreement, 2015.
¹⁰ See, for a full discussion of legal capacity constraints and their substantive effects on India’s negotiating position, Lavanya Rajamani, ‘India’s Approach to International Law in the Climate Change Regime’, Indian Journal of International Law 57 (1) (2017).
¹¹ Vijeta Rattani, ‘Coping with Climate Change: An Analysis of India’s National Action Plan on Climate Change’ (New Delhi, India: Centre for Science and Environment, 2018); Navroz K. Dubash and Neha Joseph, ‘Evolution of Institutions for Climate Policy in India’, Economic and Political Weekly 51 (3) (2016): 44-54; Sudhir Chella Rajan and Sujatha Byravan, ‘An Evaluation of India’s National Action Plan on Climate Change’ (Chennai, India: Centre for Development Finance, Institute for Financial Management and Research and Humanities and Social Sciences, IIT Madras, 2012).
¹² Radhika Khosla and Ankit Bhardwaj, ‘Urbanization in the Time of Climate Change: Examining the Response of Indian Cities’, Wiley Interdisciplinary Reviews: Climate Change 10 (1) (2018): e560, https://doi.org/10.1002/wcc.560.
¹³ Ashok Sreenivas and Ashwin Gambhir, ‘Aligning Energy, Development and Mitigation’, in India in a Warming World, ed. Navroz K. Dubash (New Delhi: Oxford University Press, forthcoming); Navroz K. Dubash, Sunila S. Kale and Ranjit Bharvirkar, eds., Mapping Power: The Political Economy of Electricity in India’s States (New Delhi: Oxford University Press, 2018).
¹⁴ Navroz K. Dubash, Ashwini K. Swain and Parth Bhatia, ‘The Disruptive Politics of Renewable Energy’, The India Forum, forthcoming.
¹⁵ Press Trust of India, ‘Tata Power to focus on clean energy, not to build new coal-fired plants: report’, The Hindu, 23 April 2019, https://www.thehindubusinessline.com/companies/tata-power-to-focus-on-cl….
¹⁶ IPCC, ‘Summary for Policymakers’, in Global Warming of 1.5°C, edited by V. Masson-Delmotte, P. Zhai, H.O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor and T. Waterfield (Geneva, Switzerland: IPCC, 2018).
¹⁷ Rohan Arthur, ‘Shoring Up: Climate Change and the Indian Coasts and Islands’, in India in a Warming World, ed. Navroz K. Dubash (New Delhi: Oxford University Press, forthcoming).