Economic instruments for industrial pollution abatement in India
Student name: Ms Meera Bhalla
Guide: Prof Badal Mukhopadhyay
Year of completion: 2011
Host Organisation: Centre for Science and Environment
Supervisor (Host Organisation): Mr Umashankar S.
Abstract: Indian scenario shows that for tackling the growing industrial pollution problem, command and
control policy regime is not enough. New market based instruments are required like taxes and
performance based incentives, to make industries accountable for the pollution they have
created. Currently the problem in India is very weak penalty structure for non compliance
industries, which fails to give price signal to the industries for the pollution they have created.
This paper attempts to include fiscal tools in current command and control policy regime of
India. On the name of pollution taxes specifically for industry there is only one water cess, which
also peanut for the industries, whereas different countries has adopted several pollution specific
taxes like tax on SO2, NOx, CO2, waste water charges on the basis of BOD or COD levels etc.
Apart from taxes other innovative tools like performance based incentives like corporate tax
deduction, image building through public participation etc are also very effective tools to solve
the concern problem.
