Case Studies in Global Business Journalism No. 5
Tata Motors and the US$2,500 ‘People’s Car’
Prepared by Patrick SMITH
The Assignment
This case is intended to help you:

Choose a thematic underpinning for a complex economics story.

Decide what topical areas must be included in the story.

Select categorical sources that will be necessary to complete the story.

Previsualize story structure and content without prejudicing the outcome.
You are a business reporter for a top-tier global news medium such as the New York Times,
Financial Times, or Wall Street Journal. You might also work for a news wire such as the
Associated Press, Bloomberg News, Reuters, or Dow Jones Newswires. The case centers on the
$2,500 "people's car," a noted Indian project. How was the concept developed, by whom, and why?
What are the larger implications of such a technology--for India, for the Indian middle class, and
not least for the global environment? The core questions go to the very notion of progress as we
must consider it in the 21st century. Is it an advance to redevelop an established technology that
will conceivably put millions of new drivers on the road, or should nations such as India be
developing alternative (in this case post-auto) technologies? Do Westerners have a right to pose
such questions?
The case requires reporters to assess not only a specific industrial project and its implications, but
also the manner in which this project has been received by others and, indeed, reported
elsewhere. The assignment is to develop an extensively interpretive and analytic piece based on
your assessment of a variety of questions raised by the project. These include, but are not limited
to, the following:
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The role of private industry in national development.
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The validity of a development strategy that relies on inherited concepts of progress and the
social good.
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The need (or otherwise) of emerging nations to develop strategies of their own devising.
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The core assumptions of multilateral institutions concerned with economic development.
Like any good reporter, your first step is to research your assignment. This case study represents
the research that you gather from the Internet and other sources. Your job now is to digest this
material and decide what direction your story will go. Remember that you are a business reporter,
so you will want to cover the corporate and labor sides of your assignment, whatever else you
plan to do. Before beginning your reporting, you must make several decisions.
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To make these decisions, you must first decide the conceptual framework you will give your story.
Please see the introductory note for these cases, How to Approach Case Studies In Global Business
Journalism, appendices I and II, to help you make this decision. Appendix I describes a hard-news
conceptual framework for business stories. Appendix II describes a similar framework for features
and analytic stories. You must also take care to source your story carefully. See Appendix III, a grid
of source categories. Ask yourself how you might adapt each to your story and whether it's
essential to gather information from the specific sources you select.

What will be the story's theme—the backbone that holds all its elements together? What is
the central point you are making or the crucial question you will answer?

What sources—documentary and human—must you pursue to ensure your story is
accurate, fair, and complete? What information must you gather from those sources?

Which conceptual framework will you use to structure your story?

What do you envision as the lead passage to your story?

What is the "nut" of your story? This is the central point that gives your article unity. If you
had to put the story on Twitter, what would your tweet say?

What sections, such as history or context, or consequences, will you include in the gut, or
middle portion, of your story?

How will you end your story on a compelling note?
Remember that your understanding and your plan of attack will probably change as you report.
You might, for instance, encounter a better lead. You might have to modify your nut section. This
case study is designed to help you sift through large amounts of disparate information; decide
what the focus of your story should be; and organize your reporting around a default plan for the
story's organization.
The point of this case is to help you link thinking, reporting, and writing beginning the moment
you receive your assignment. You will find this a superior alternative to reporting without focus
and then trying to give coherence to the pile of material that you bring back to your newsroom.
Your work product from this assignment should be concise answers to the eight questions
highlighted above. There are numerous possible themes and areas of focus in the case material.
Consider them all and pick yours. Your job is to decide which one is most important for your
readers. Be prepared to defend your decision and to explain in detail how your story will come
together. Good luck.
The Tata Motors Project
In March 2002, Ratan Tata, the chairman of Tata Motors Ltd. (and chairman of the Tata Group)
announced plans to develop the world’s least expensive car. The initial plan was to build a vehicle
that would make four-wheel transportation accessible to 2 million to 3 million Indians per year.
“The people’s car,” as the project was known, was to be priced at 100,000 rupees, approximately
US$2,500. Sales were initially to be limited to the domestic market.
Ratan Tata’s core concept involved a reconsideration of every aspect of vehicle design and
production. The initial plan was to use foreign partners and products to build a car modeled after
the small “city cars” then gaining popularity in Europe—the Mercedes “Smart Car,” for instance.
The transmission for the people’s car was to be based on motorcycle technology; engines would be
small, and the chassis and body parts light. Manufacturing was to be based on a new model:
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Instead of mass production at centralized plants, the car would be made at numerous small-scale
rural factories licensed by Tata Motors. These factories would also sell and service the car,
eliminating dealers’ margins.
Plans for the design and production of the people’s car evolved through numerous iterations in the
following years. Many ideas were tried in an effort to keep the car within budget and hold the
retail price to Tata’s promise. Tata Motors considered, for instance, making the car at its own
plants, as opposed to licensing production, and selling it to low-volume rural assemblers in the
form of knockdown kits. It researched the use of a modular design and a space frame that could be
shipped anywhere; it considered using adhesives instead of welding to join components; plastic
would replace steel whenever possible.
From its inception, the people’s car reflected the pronounced social awareness of Tata’s
executives, engineers, and designers. The project’s intent, Ratan Tata said when he announced it,
was “to bridge the mobility gap between cars and scooters.” The executive added: “This new way
of manufacturing should also address issues of rural employment.” As the project proceeded, it
gradually became clear that Tata would have to balance such wider ambitions (as well as many of
its planned technological innovations) with the limitations of India’s small- and medium-scale
manufacturers, and numerous cost and safety considerations.
In May 2006, Tata Motors announced it would invest $220 million in a 700-acre plant to be built in
Singur, West Bengal; an additional 300 acres would be developed to accommodate suppliers to the
project. The plant was to employ 2,000 people directly and create a total of 10,000 jobs. At the
time it was unclear what role, if any, rural manufacturers might eventually play in the project. It
was suggested that they might still be permitted to assemble kits to accommodate demand beyond
the plant’s capacity.
In June 2007, Ratan Tata named a team to complete the project on schedule. An executive from
Tata Quality Management Services, a separate Tata enterprise, was placed in charge of the
project’s final development phase. Tata Motors concurrently announced plans to raise $450
million in overseas securities markets, part of which would be dedicated to future expansion of
the people’s car project. At this time Tata also announced commitments to 15 suppliers. Among
them were three Tata units: Tata Ryerson, Tata Bearings, and Tata Johnson Controls; others
included Sona Koyo Steerings, Rico Auto, Kinetic Engineering, and Gabriel.
The people’s car, by this time named the Nano, was unveiled on time at a car show in New Delhi in
January 2008. Many of Tata’s original ideas were scrapped, but Tata met its target: To offer a car at
100,000 rupees, it had to produce it ex-factory for 65,000 rupees, and it did so. The car had a
welded steel body and a 600 cc engine available in gasoline and diesel models. The engine was
rear-mounted to save on drive-train components. It was also produced by Tata alone, as no
foreign manufacturer was able to meet Tata’s budget requirements. The Nano conformed to
international safety and emissions standards.
The production volume required to achieve profitability rose significantly because of Tata’s exfactory price: The company calculated it would have to build a minimum of 350,000 Nanos per
year, about 40 percent more than is ordinarily required in the small-car segment. Initial
production was allocated to an existing Tata Motors factory with a capacity of 50,000 units,
pending completion of the new facility.
Tata Motors reported paid orders of 200,000 units after the Nano was commercially launched in
March 2009. By the end of 2009, it was selling approximately 3,000 units per month; its target was
to deliver 60,000 cars by mid–2010.
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In October 2009, Tata Motors unveiled the Manza, advancing it as the world’s least expensive
luxury car.
The Tata Group and Tata Motors
The Tata Group, which has its headquarters in Mumbai, is among India’s largest and most
globalized industrial conglomerates. It is comprised of nearly 100 companies, each with a separate
board of directors. The group is active in communications and information technology,
engineering, materials, services, energy, consumer products, and chemicals. Twenty-seven Tata
enterprises are publicly listed, with an aggregate market capitalization of roughly US$60 billion.
Group revenues in the 2008–09 fiscal years were US$71 billion; about two-thirds of this amount
derived from international operations. The Tata group employs almost 360,000 people
worldwide.
Tata was founded as a trading company in 1868. It was initially active in steel, electric power,
textiles, and hotels—all of which remain sectors in which Tata has businesses. Tata’s first largescale industrial project was a textile mill opened in 1877. It opened the Taj Hotel in Mumbai in
1903 and Tata Iron & Steel a year later. In 1932, Tata launched Air India, which was nationalized
as the flag carrier in 1953. Tata has a long history of philanthropy and of investing with the public
good and the development of India in view. Philanthropic trusts formed by the Tata family over
many generations now hold two-thirds of the stock in Tata Sons, the group’s holding company.
Tata Motors Ltd. was founded in 1945 as the Tata Engineering & Locomotive Co., or Telco. It is
now the largest vehicle manufacturer in India and among the world’s top five makers of mediumduty and heavy-duty trucks. The company first entered the passenger-car market in 1991. In the
mid–1990s, it began an aggressive expansion of its product range. In 1994, it unveiled the Sumo, a
sports-utility vehicle. In 1998, it launched the Safari, another SUV, and the Indica compact, the
nation’s first indigenously developed passenger car. In 2002, it introduced the Indigo sedan, and in
2004 the Marina station wagon. Tata now ranks second, behind Maruti, among Indian
manufacturers of passenger cars. In the year to end–March 2009, Tata Motors reported operating
income of 25,660.67 crore rupees and operating profit of 1,723.1 crore rupees. (A crore rupee is
10 million rupees.) The company listed on the New York Stock Exchange in 2004.
Web references
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Tata Motors annual report
http://www.tatamotors.com/investors/download/download-details.php
Hoovers on Tata Motors.
http://www.hoovers.com/company/Tata_Motors_Limited/hxtrif-1.html
The Indian Auto Industry
The Indian auto industry began in the 1940s. The Birla industrial group founded Hindustan
Motors Ltd. in 1942; Premier Automobile Ltd. started operations two years later. In 1949 HM
began selling the Ambassador, a sedan based on a British design that remains, six decades later, a
big seller. The “Amby” is also a sentimental favorite, symbolizing India’s early dedication to selfreliance in industry. HM and Premier were the only car manufacturers in India until 1981,
reflecting the government’s vigorous protection against imports and regulation of the domestic
industry.
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India’s car market, which was virtually non-existent prior to independence, remained small for
several decades after 1947. This reflected several factors: India was poor and underdeveloped
industrially; despite the urban drift typical of newly independent countries, most of its people
were still village dwellers. India’s development strategy also played a role. While import
substitution policies kept foreign competitors out, heavy industry was given priority over
consumer-oriented sectors such as passenger cars by way of licensing and production restrictions.
In 1960, India had one vehicle (including commercial vehicles) per 1,000 people, one of the
world’s lowest ratios; per-capita income that year was US$900.
In 1981, the Indian government formed a joint venture with the Suzuki Motor Corp. of Japan.
Maruti Udyog, as the company was named, became the third manufacturer of cars in India—and
the largest with the highly popular Maruti 800, which the company introduced in 1983. Reflecting
a fundamental shift in Indian economic policy toward the private sector, the Indian government
began to sell its stake in Maruti via a public offering in 2003. In 2007, it completed its withdrawal
from the company; the same year the company changed its name to Maruti Suzuki India Ltd. It
remains the market leader in passenger cars.
The Maruti 800 marked India’s first effort to produce a vehicle based on the concept of a people’s
car. It was at this time that the government began to liberalize the auto sector, allowing foreign
companies to compete in the passenger-car segment for the first time. Economic liberalization
gained significant momentum after 1991, when the government announced its New Economic
Policy—in essence a dramatic shift away from the post-independence emphasis on state controls
and state ownership in a wide variety of industrial sectors.
The auto industry, with numerous new foreign and domestic competitors, has since entered a
period of unusually high growth. It expanded by an average of 12 percent yearly in the decade
through 2007. That year the passenger-car market came to roughly 1.3 million units, compared
with sales of 20,000 to 30,000 in the industry’s earliest years. There are strong indications that
this growth rate will be sustained. Per-capita ownership of passenger cars, despite recent growth,
is still about seven per 1,000 people, compared with about 450 per thousand in the United States.
Based on its domestic market and increasingly competitive exports, India now expects to claim a
significant place in the global car market by 2016.
Web references
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Vehicle ownership, per cap income
www.econ.nyu.edu/dept/.../DGS_Vehicle%20Ownership_2007.pdf
Recent production trends
http://www.siamindia.com/scripts/production-trend.aspx
Government plan for the auto industry
www.dhi.nic.in/draft_automotive_mission_plan.pdf
India’s Infrastructure and Environment
Infrastructure
Reflecting the colonial administration’s strong emphasis on rail transport, a technology Britain did
much to develop, at independence India was left with an extensive railroad network and
extremely poor roads. Most roads were intended for local use; there were few national highways.
This transport structure remained in place for many decades, even as deterioration of the rail
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network caused a measurable shift to road transport. Over the first 50 years after independence,
India built less than 350 miles of four-lane expressway.
By the 1980s, as India began to reassess its post-independence development policies, it had
become increasingly evident that poor infrastructure of all kinds—particularly roads, ports, and
telecommunications—was a bottleneck that would hinder the country’s bid to make itself globally
competitive. As part of the effort to address this problem, parliament mandated the National
Highway Authority of India in 1988. In the years that followed, NHAI developed a phased plan to
extend, rebuild, and widen India’s highways. This plan was ready for implementation by the late
1990s; Phase 1 was officially approved in December 2000. At this time, India had about 3.3 million
kilometers of roads; about 2 percent of the road network—roughly 66,500 kilometers—was
classified as highway or expressway, although it accommodated 40 percent of all road traffic.
The National Highway Development Project is scheduled for completion in 2012. It is planned in
seven stages and represents the largest infrastructure project India has undertaken since the
British built the rail network. Among its principal features are the Golden Quadrilateral, an
expressway of nearly 6,000 kilometers that will link Delhi, Mumbai, Kolkata, and Chennai; and the
development of east–west and north–south corridors of four- and six-lane expressways. The
project’s total cost has been budgeted at 220,000 crore rupees.
The environment
India’s environment, particularly in its large urban areas, has been of increasing concern since the
reforms of 1991 moved India into an era of industrial development and (with fluctuations) a
higher rate of economic growth. In 2007, the World Bank identified environmental sustainability
as “the next great challenge that India faces along its path to development.” The report listed three
industries directly related to auto production—aluminum, copper, and steel—among the top eight
of the country’s polluters; cement, an obvious key to infrastructure development, was fourth on
this list.
India has been attempting to counter its environmental challenges. But for a variety of reasons,
significant improvements have failed to materialize. There appears to be a lack of coordination
among Indian institutions and, in some cases, an absence of bureaucratic and executive will. In
early 2009, for example, the prime minister’s office ordered the government to issue national fuelefficiency standards; nearly a year later, these had not been developed. Among industries it
monitored, the World Bank found that 50 percent of them complied with environmental
regulations.
Autos are a significant contributor to the nation’s environmental problems. In Delhi, which is
among the most polluted of India’s cities because of its congestion and topography, the Supreme
Court ordered the bus system to switch to compressed natural gas in 1998. But after a period of
improvement, levels of particulates suspended in the city’s air rose again. In 2008, they were
approximately three times levels considered safe; carbon monoxide levels in the capital were, at
their highest, roughly triple the level considered acceptable. Because India’s topography and
demographics are so varied, there is no meaningful way to measure pollution levels on a
nationwide basis.
At present, the Indian tax structure heavily favors the use of private cars over buses. By 2010,
according to the Society of Indian Automobile Manufacturers, diesel-powered passenger cars are
likely to account for 50 percent of the market for private cars.
Web references
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National Highway Authority of India
http://www.nhai.org/
The National Highway Development Project
http://www.nhai.org/whatitis.asp
A relevant New York Times article
http://www.nytimes.com/2005/12/04/international/asia/04highway.html?ex=12913524
00&en=d77dd2ca4f760ef0&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
Centre for Science and Environment
http://www.cseindia.org
Response to the ‘People’s Car’ Project
From its inception, Tata’s “people’s car” project has prompted comparisons with the experience of
other countries when they were at stages of their development that correspond roughly to India’s
in the new century. Making four-wheel transportation available to a much larger segment of the
population is what Ford did with the Model “T,” Volkswagen with the “Beetle,” Citroën with its
“Deux Chevaux,” and what Japanese carmakers did with a range of products in the early postwar
decades.
Foreign governments have been silent on the Tata project; none has commented. Multilateral
institutions such as the World Bank and the Asian Development Bank have not addressed the
project directly. Among domestic and foreign auto industry executives, statements about the Nano
have focused on Tata’s technological decisions, the car’s design, economic and marketing
feasibility, and the like.
Nonetheless, the Tata undertaking has generated considerable debate and criticism among
independent analysts and observers and nongovernmental organizations, from its development
phase until the present. Most of this attention reflects concern that the project will further damage
India’s environment and that, more broadly, it is the wrong path for the nation to take at this
moment in history. Given a population of 1.1 billion people, these analyses often note, to
encourage car ownership will eventually produce undesirable outcomes across a range of areas.
These include pollution levels, resource consumption, vehicle quality and safety, and perennially
overstressed infrastructure despite the nation’s efforts to improve it.
Criticism from foreign observers, with notable exceptions, has tended to be muted. Domestic
critics have been sharper and significantly more detailed. Overall, they have focused on the
absence of a new, imaginative, homegrown, and holistic vision of how India should proceed as it
enters the ranks of middle-income nations.
Web references
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
Centre for Science and Environment
http://www.cseindia.org/AboutUs/press_releases/press-20090313.htm
A column by Thomas Freidman, New York Times
http://www.nytimes.com/2007/11/04/opinion/04friedman.html?_r=1&scp=1&sq=No,%2
0No.%20No,%20Don't%20Follow%20Us&st=cse
Appendix I: Interview with Ratan Tata.
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The interview was conducted at the end of 2007 as Tata Motors prepared to unveil the Nano. It was
published in January 2008. It is featured on the Tata web site.
http://www.tata.com/article.aspx?artid=Sd75BUBmzSM=
The Tatas and you, in particular, are on the brink of realising a long-cherished ambition. Do
you feel vindicated? Are you apprehensive?
There has always been some sort of unconscious urge to do something for the people of India and
transport has been an area of interest. As urbanisation gathers pace, personal transport has
become a big issue, especially since mass transport is often not available or is of poor quality.
Two-wheelers — with the father driving, the elder child standing in front and the wife behind
holding a baby — is very much the norm in this country. In that form, two-wheelers are a
relatively unsafe mode of transporting a family. The two-wheeler image is what got me thinking
that we needed to create a safer form of transport.
My first doodle was to rebuild cars around the scooter, so that those using them could be safer if it
fell. Could there be a four-wheel vehicle made of scooter parts? I got in touch with an industry
association and suggested that we join forces and produce what, at that point, I called an Asian car:
large volumes, many nations involved, maybe with different countries producing different sets of
parts… Nobody took the idea seriously, nobody responded.
This was similar to what happened when we wanted to get going on the Indica. I had proposed a
partnership with an industry body to create an Indian car, designed, developed and produced in
India, something that could be conceptualised and executed as an Indian enterprise. Everybody
scoffed at the concept. I remember people saying, "Why doesn't Mr Tata produce a car that works
before he talks about an Indian car." My confidence got a boost when we finally succeeded with
the Indica. Willy-nilly, we decided to look at [the low-cost car] project within Tata Motors.
It was never meant to be a Rs1 lakh car; that happened by circumstance. I was interviewed by the
[British newspaper] Financial Times at the Geneva Motor Show and I talked about this future
product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next
day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car.
My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said.
Then I thought, I did say it would be around that figure, so why don't we just take that as a target.
When I came back our people were aghast, but we had our goal.
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Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are
not there yet, but by the time we go into production we will be. This project has proven to
everyone that if you really set yourself to doing something, you actually can do it.
Two-three important events have influenced the development of the car - inflation, for one. The
cost statement was made three-four years back but we are holding on to that price barrier. This
will definitely diminish our margins. The price of steel, in particular, has gone up during the
intervening period.
A second point is that we initially conceived this as a low-end 'rural car,' probably without doors
or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw,
in a manner of speaking. However, as the development cycle progressed we realised that we could
— and needed to — do a whole lot better. Therefore, we slowly gravitated towards a car as
everyone expects a car to be. The challenge increased exponentially; there was the low-price
barrier, inflation, adding more features and parts to the vehicle, substantial changes in basic raw
materials… What the team has been able to achieve, in the face of all these constraints, is truly
outstanding.
What does it mean to me? It means that we have in us the capability to undertake a challenge that
many car companies have chosen not to address or have been unable to address.
What are the innovations that have made the Tata Nano possible, from design to product
finalisation?
Initially I had conceived a car made by engineering plastics and new materials, and using new
technology like aerospace adhesives instead of welding. However, plastics didn't lend themselves
to the volumes we wanted because of the curing time required. Volumes mean the world in this
context: if we produce this car and if it is for the wider base of the pyramid, we can't settle for
small numbers because then the purpose is defeated.
When we were planning facilities for the car and working out a business plan, the business plan
shown to me was looking at a figure of 200,000. I said the figure is crazy. If we can do this, we
should be looking at a million cars a year, and if we cannot do a million then we shouldn't be doing
this kind of car at all.
Such a figure - a million cars - has never been achieved in the country before. If it had to be done
the conventional way, it would have meant investing many billions of dollars. So we looked at a
new kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing
unit that we design and give to entrepreneurs who might like to establish a manufacturing facility.
We looked at different ways of servicing the product, at the customer's location, and through a
concept adopted from the insurance industry, wherein self-employed people are trained and
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certified by us. And, we went back to innovation in design and scrupulously took, as much as we
could, cost out of the product.
We did things like make similar handles and mechanisms for the left- and right-side doors; we
developed our own small engine which could sit under the rear seat, enabling us to craft a smaller
overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We
have put our instrument cluster in the middle, not in front of the driver. This means the same
dashboard will work for a left-hand-drive vehicle. There are many such innovations that are lowcost and future-oriented.
Equally important to the cost structure was the incentive we could get from having our
manufacturing facility at a particular place. The benefits on this count will be passed on to the
customer.
Our move to West Bengal was a leap of faith and a sign of our confidence in the leadership in the
state. We were breaking new ground, not only on the product front but also in helping
industrialise a previously ignored part of India. But we did not start out getting the incentives that
other states were offering. I remember telling the chief minister [Buddhadeb Bhattacharjee], "Sir,
much as we have tried, it makes no sense for us to come to West Bengal. We cannot meet the cost
requirements we have without incentives." It was then that we negotiated a set of incentives that,
long-term, work out to be the same as we may have had if we set up in some other place.
Other than emission norms and safety standards, what are some of the other challenges,
physical and psychological, that Tata Motors had to overcome to make this car happen?
There was the usual dilemma of what is basic and what is nice to have. A basic car may not have all
the niceties its fancier cousins sport, and when you're looking at saving money on every single bit
of the car — even parts that cost as little as Rs20 — you keep facing these dilemmas. Hundreds of
such dilemmas have risen.
However, we were always conscious that there should be no quality stigma attached to the buying
of this product. One thing we were clear about: this was never going to be a half-car. Nobody
wants a car that is less than everybody else's car. Our car may have a small engine and certain
limitations in terms of being basic, but that does not make it inferior. In addition, we have a higher
version of the car — with air conditioning, leather seats, etc — that we will be displaying at the
auto show in Delhi. We hope people will look at that, too. As we widen our range down the line, we
will have dressed-up versions with higher-powered engines, diesel engines, automatics and the
like. We have a whole bunch of innovations coming along on this platform.
What we now have is a car that is truly low-cost, which has, approximately, the same performance
as a Maruti 800 in terms of acceleration, top speed, etc.
When future versions of this car hit the market, will they not be in direct competition to the
Indica?
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No. The way I see it, this vehicle will cannibalise some of the lower-end car market and some of
the higher-end motorcycle and scooter market. It will eat into both of those markets but it will also
create a market of its own. It will expand the market by creating a niche that did not previously
exist. It may well cannibalise some of the higher-end car market, but to a small extent, and
probably only when people look to buy a second or third car.
About the criticism that the car will add to India's pollution problems, why are the Tatas
being singled out?
This is something I'm going to talk about at the launch. For now, let me just say our car will cause
less pollution than a two-wheeler.
I'm trying to think of a parallel where someone has introduced a product at a disruptively low
price and changed the market. A good example would be the Swatch watch, low-cost, trendy and
with a wide range. Did Swatch finish off the Swiss watch industry? No. (In fact, it was a Swiss
company that created Swatch, the same company that produced Omega.) Did it finish off Citizen,
Seiko, and other Japanese competitors? No. Did Swatch cause the Japanese and others to produce
something like the Swatch? Yes, it did, but Swatch continued to dominate its niche.
What did this do to the global watch industry? It enabled somebody to look at a wristwatch almost
like cufflinks: you could buy 10 Swatch watches; you could wear different ones for different
occasions. Swatch sold multiple watches for a single wrist. I think something similar could also
happen with the Nano.
Why are people attacking only the Tata Group?
I think it comes from vested interests. Let's ask ourselves why the car is attracting so much
attention and why it is being attacked so much. My view is that if the car were not attracting all
this attention, it wouldn't be attacked. This car has provoked serious apprehensions in some
manufacturers. There are people in our company even who fear what it will do to the Indica. Do
you think there's a concern among three-wheel manufacturers that it might replace their vehicles?
Yes, there is because some three-wheelers cost more than what the Nano will cost. All in all, I think
people are attacking us because they are apprehensive.
Has the Indica experience helped in the creation of the Nano?
Oh yes, enormously. The Indica experience and the Ace experience have helped; Ace especially
because it was another tight, cost-based exercise.
From the Rs1 lakh car to products costing many millions, if the Jaguar deal comes through:
What next for the Tatas on the automotive front?
I won't comment on the Jaguar deal, but to answer your question, we are not in an acquisitive
mode. That's not our strategy for growth.
The Tatas have been on the front pages constantly of late-- what is it like being in the
middle of it all?
Embarrassing and unpleasant. Whenever you are on the front page, you are also — each time, and
more so in India than elsewhere in the world — creating detractors and critics. For every action,
there is some kind of reaction, somebody who is hunting for something to criticise. And most
often, it is the reaction that people remember. This is all the more embarrassing because we are
not a Group that seeks publicity.
If you look at the coverage that has happened, you cannot fail to notice how the low-cost car has
been turned into an issue of congestion, of pollution, of safety. Initially it was all about why a car at
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this cost was simply not possible; that talk is long gone, only to be replaced by these 'new'
concerns. We are not really talking about how it will change the way people live or transport
themselves, what their aspirations may be.
Ideally, I would really wish we didn't have the visibility and the media publicity because we
haven't sought it.
Appendix II: Executive summary of India: Strengthening Institutions for
Sustainable Growth
The World Bank report published in April 2007. The full report can be found at:
http://siteresources.worldbank.org/INDIAEXTN/Resources/2955831169456822314/India_CEA_Report_FINAL_Dec.pdf
1. For over a decade, from the early 1990s, India has experienced one of the fastest economic
growth rates in the world, averaging over 6 percent and reaching 7-8 percent per year since 2003.
While the country still continues to face the tremendous challenge of reducing poverty for 354
million (representing 27 percent of the world’s poor) of its over one billion population, robust
economic growth has already allowed millions to emerge from poverty creating a sizable middle
class of 300 million people. This growth has been a dramatic driver in the nature and scale of
impact on the country’s environment and natural resources.
The Challenge: Rapid Growth in Extremely Diverse Natural, Economic and Social
Environment
2. Given the high population density, vulnerable ecology, extreme climate and a significant share
of the economy heavily dependent on the natural resource base, environmental sustainability
might well be the next greatest challenge along India’s development path, adding to the list
of priority needs, such as reducing disparity, eliminating poverty and promoting social cohesion.
Mirroring the country’s size and diversity, environmental risks and problems are wide-ranging.
India’s dual features of a low income economy and a middle income economy are reflected in the
environmental damage estimates. The damages are still dominated by “poverty-related” risks,
such as lack of sanitation and indoor air pollution in rural areas. However, the share of “growthrelated” risks manifested by the deteriorating urban environment, industrial waste and chemical
pollution is increasing. As the country finds itself into the second decade of strong economic
performance, making and further planning massive investments in infrastructure, urban
development, and industrialization, the issues of managing the environmental impacts associated
with this rapid growth are capturing public attention.
3. To deal with these impacts, India has developed a comprehensive set of environmental laws and
institutions, including a very active judiciary. Despite a strong policy and institutional framework
and some successes, environmental degradation has not been arrested on a large scale. The
country-wise average compliance ratio for monitored industries (falling far short of all polluting
sources) is only 50 percent. Furthermore, the trends in environmental quality indicators are
mixed; for example, urban air quality (measured as suspended particular matter of less than 10
microns) has been improving in the largest cities, such as Delhi and Mumbai, where significant
efforts have been made to control multiple pollution sources, while it is deteriorating in many
other cities.
4. The immense unfinished agenda underpins the deepening dissatisfaction with the state of
environmental affairs by a growing and increasingly vocal “green” constituency, resembling, in
some ways, a historical pattern of 1960s in industrialized countries. A rising public demand for
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better environmental quality, often driven by the influential urban middle class and backed by
the judiciary (as in the famous case of cracking on Delhi’s air pollution), is being increasingly
matched by voluntary environmental performance obligations from India’s large-scale corporate
sector and industry asserting a prominent role in the global market.
5. This demand, however, is yet to be matched by the regulatory capacity of environmental
agencies. While the capacity of the Ministry of Environment and Forests (MoEF), the Central
Pollution Control Board (CPCB) and the State Pollution Control Boards (SPCBs) has improved over
time, keeping up with the challenges of rapid growth has proved difficult. Many would argue that
the judiciary filled the vacuum left by the lack of regulatory oversight. India’s enormous economic
and social diversity needs to be better appreciated in this context. There are significant segments
of population that have other more pressing priorities. Thus, political commitment to
environmental improvement still varies by State and constituency, particularly when measured up
against multiple competing needs. This has a bearing on the status and capacity of both the State
and national environmental agencies. And besides a large-scale sector, there are numerous
smaller scale industries (the backbone of India’s growth and employment), which are often unable
to adopt modern technologies that would be required for compliance with environmental laws.
The understanding of the environmental impacts, their origins, consequences and cost-effective
mitigation strategies, while evolving gradually, is still incomplete, particularly with respect to
cross-sectoral and cumulative impacts. The understanding and perceptions significantly differ
across stakeholder groups. All of this further complicates the formulation and delivery of an
effective regulatory response that would benefit from a broad-based support.
The Study
6. The objective of this Country Environmental Analysis was to help strengthen the environmental
policy implementation framework, to meet the challenges of a rapidly growing and extraordinarily
diverse economy in India. In particular, the study aimed at assisting with the implementation of
the new National Environment Policy (NEP 2006), which was released in draft for public
consultation at the time this study was initiated. The scope of work was developed through
extensive consultations with the MoEF, the main study counterpart, and multiple other
stakeholders to focus on priority issues not covered by and complementary to recent or on-going
work. Given that a review of the Environmental Impact Assessment (EIA) process was
commissioned by the MoEF earlier and was nearing its completion at the time this analysis was
about to start, this study focused on identifying and proposing ways to address major gaps in the
existing institutional arrangements, as well as regulations and incentives for post-EIA
environmental compliance and performance.
7. In view of the focus on the growth–environment nexus, the study covered three select sectors —
industry, power (including three distinct sub-sectors: coal-based power generation, hydro power
generation, and transmission), and highways — that are among the key drivers of growth.
Together, these sectors represent a wide range of environmental impacts, sources and regulatory
issues that allows drawing conclusions of broad relevance. The analytical framework used by this
study was a combination of sector-wide reviews, based on secondary data of issues, policies,
regulations and institutions, with several case studies of implementation experiences. Ranging
across seven Indian States, the project-level case studies helped to gain a deeper understanding of
barriers, as well as contributors, to better environmental compliance and performance in the reallife situation. The case studies involved primary data collection and consultations with local
stakeholders. Selective reviews of international experience in environmental management were
also conducted. The findings from all reviews and case studies have been integrated to leverage
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support for corrective actions building on a growing number of good practices in India and
internationally.
8. A central feature throughout this study has been the extensive consultations and dialogue with
various concerned sectors and players. Roundtable discussions, meetings, brainstorming events
and workshops took place in December 2004, April 2005 (launch workshop), June 2005, August
2005, December 2005 (multi-sectoral consultation workshop on early findings) and July–August
2006 (consultation on the draft final report). A major public (non-governmental organization;
NGO) consultation workshop was held in July 2006, followed by meetings with government
representatives of all the sectors involved (environment, industry, power, and highways). In
addition, several consultations were held by study consultants during summer 2005 with local
stakeholders at the project sites selected as case studies. The draft report was also posted on the
Internet for broader public review and feedback during June–July 2006.
9. A highly consultative process was particularly important because, from the onset, the main
added value of this exercise was not as much in producing new knowledge or a new analytical
result, as in helping to develop a commonly shared vision on the way forward, reconciling
different perspectives by diverse stakeholders. The importance of this approach was further
reinforced by a conclusion from the study that the lack of effective dialogue among opposing
stakeholders is becoming a binding constraint to further progress, so much desired by the very
same stakeholders.
10. The key findings and recommendations of the study are grouped under five themes: (i)
facilitating national dialogue and public participation; (ii) expanding the regulatory toolkit to
enable environmental compliance; (iii) strengthening the capacity of environmental agencies to
meet the growing demands, (iv) aligning sectoral incentives with environmental priorities; and (v)
working across sectors.
Facilitating National Dialogue and Public Participation
11. While the impetus for change and more effective action is building up and being recognized,
albeit to a varying degree, at all levels and by all players, there is a serious breakdown in public
trust and constructive dialogue with respect to addressing a very complex and non-trivial set of
issues. Increasing confrontation and suspense make the much needed environmental
management reforms difficult to agree upon and implement, further exacerbating environmental
problems. There is an urgent need to start working towards developing a commonly shared
vision on the way forward, involving all principal stakeholders and reconciling diverse
perspectives.
12. Managing expectations from the public and decision-makers regarding the public participation
process is important. Successful public participation does not just happen. One of the key
recommendations is to carefully plan and execute a long term national program for
supporting public participation in environmental management aimed at educating and
building capacity of all stakeholders involved. The first step could be to develop detailed
guidelines, as well as provide training, on public participation for both State-level environmental
authorities and sectoral agencies (adjusted to sector’s specifics). Significant attention should be
given to building civil society capacity at the community level to help communities understand
the environmental issues and linkages to sector activities, and thus effectively garner participation
in public forums. Overall, the program should be designed and targeted according to the diversity
of India’s stakeholders (with some of non-government stakeholders being more educated than the
regulator).
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13. While it is very important to increase the effectiveness of the more traditional forms of public
participation, such as public hearing, the program should also promote innovative and more
interactive approaches that can increase the level of public awareness, involvement, and
ownership of environmental problems and solutions. One such example, already piloted in India,
is the citizen involvement in environmental monitoring and enforcement, which should be further
supported.
14. Furthermore, the passage of the Right of Information Act (RTIA) provides a valuable
opportunity for developers and regulators to improve public relations, which they cannot afford
to miss or under-utilize. It is important to widely disseminate policy guidelines on the type of
information the public has access to. The Information and Facilitation Counter (IFC) launched by
the MoEF in December 2005 is an excellent initiative to make information easily available. This
should be extended by making special efforts and arrangements to effectively reach out to the
entire country, including remote locations.
15. Effective environmental enforcement requires informed consensus on environmental
management objectives and policies that are based on a good understanding of the shared roles
and responsibilities of all players, including the regulator, the regulated community
(developers and polluters) and the affected community (general public). This fundamental notion
of shared responsibility is currently challenged in India by the general perception among the
public, project proponents, and development authorities alike that environmental ills are the sole
responsibility of environmental agencies failing to effectively implement and enforce the laws. As
India’s economy continues to accelerate, the performance of the environmental regulator will
come under increased scrutiny and pressure. The study shows, however, that unless an increasing
public demand for better performance by the environmental regulatory agencies is matched by
adequate support to these agencies, conditioned on institutional reforms to increase efficiency,
transparency and accountability, it would be naive to expect substantial progress and unfair to
solely blame the regulator for the lack of it.
Expanding the Regulatory Toolkit to Enable Environmental Compliance by Diverse Sources
16. The analysis revealed that much remains to be done to strengthen the regulatory,
enforcement, and incentive mechanisms at the disposal of environmental agencies. The
main focus on large point sources in applying environmental regulations does not match the scale
and diversity of the India’s economy, with its multiple pollution sources, dominated by small-scale
industrial units or often being outside the industrial sector. Nor is it responsive to changing
pressures resulting from the country’s accelerated growth, such as unwieldy urbanization and
regional development that are overstretching both public infrastructure and the carrying capacity
of the natural environment; massive expansion in highways and transmission lines; or private
investment in power generation using imported coal with different properties than those the
current regulation is designed to control. At the same time, as highlighted in the NEP 2006,
enforcement efforts are undermined by the lack of credible deterrents: the two key sanctions
currently available to the regulator — filing a criminal case against a violating company or issuing
an order to shut it down — are either too time consuming to pursue or too extreme to be routinely
used.
17. In sum, the toolkit the regulators use to facilitate compliance needs to be considerably
expanded and strengthened to adequately deal with a very diverse regulated community. This
would require new regulatory programs and approaches for different categories of priority
sources, particularly targeting activities other than large point sources that cause significant
cumulative environmental impacts. Specifically, there is a need for regulatory programs targeting:
15
(i) numerous small and medium enterprises (SMEs), estimated by the MoEF to account for 70
percent of the total industrial pollution load; (ii) the growing municipal sources of pollution; (iii)
multiple industrial, municipal and transport sources contributing to environmental degradation in
a particular area or ecosystem; and (iv) linear projects with complex direct and indirect (induced)
impacts, such as the highways projects. The new regulatory programs should be designed to (i)
deliver a credible threat of enforcement, using, where needed, innovative methods and
mechanisms tailored to a targeted group of sources; and (ii) make a greater use of suitable
economic incentives, particularly for small-scale businesses with higher abatement costs. Some
actions are already being taken but a bolder and more systematic effort is needed.
18. The study recommends wider dissemination of and learning from recent successful examples
in India and elsewhere of effective packages for clusters of SMEs that combine focused
enforcement effort with extensive outreach and compliance assistance in the form of
knowledge, capacity building, and financial aid, such as a matching grant or soft loan, to help with
the cost of adopting a cleaner technology. The emerging lessons could be used for initiating a
national program for SME clusters that would guide the design and implementation of
suitable packages at the local (municipality) level tailored to the specific local circumstances.
The program could also provide matching grants for compliance assistance, expanding the current
initiative by the MoEF that supports the construction of common effluent treatment plants (CETP)
for SME clusters to other pollution control and prevention measures identified as priority by the
respective local program. When applicable, it would be also useful to facilitate, as part of this
program, access to carbon finance (as in the case of energy efficiency/clean fuel switching
measures) or other concessional global environmental financing instruments.
19. To deal with multiple sources of pollution within a particular area, it would be important to
build on lessons from considerable past experience in India and internationally for designing
more effective area-based pollution management programs, particularly for new priorities,
such as urban air quality action plans or hazardous waste management. Making this approach
more effective for India would likely require linking it with the decentralization process and local
government agenda, strengthening the authority of municipalities and regional development
authorities, and enabling them to facilitate integration of multiple sectoral strategies and
stakeholders.
20. Better recognizing the vast diversity of regulated sources in applying national discharge
standards is another important area of refining regulatory approaches towards ensuring a
greater level of compliance. The process of setting source standards should better recognize
significant differences in the ability to adopt pollution control and cleaner process technologies
required for meeting these standards, between large and small units and between new and old
facilities (particularly old public utilities, such as power plants). There is a need to strengthen and
clearly define the methodology for an economic impact assessment of the proposed
environmental standards and regulations, drawing on best international practices. This
assessment would provide a scientific basis for differentiating the requirements between different
categories of sources, as well as allowing a phased implementation schedule, adjusted to different
sources and locations, which is feasible for meeting the new requirements. At the same time,
regulations should be backed by credible enforcement sanctions for failure to meet new standards
by the established deadline as well as provide practical incentives to facilitate compliance with the
new standards ahead of schedule (an approach often used by the European Union countries).
21. One of the top priorities is to strengthen the current system of punishment for environmental
violations that is too difficult for routine implementation in the situation of widespread noncompliance. It would be important to promptly evaluate, refine and expand the recently
16
introduced bank guarantee system in select States (an application of the environmental
performance bond instrument), as a condition of renewing an environmental license (“Consent to
Operate”) for violators. There is also a need for exploring other innovative schemes to strengthen
enforcement deterrents, as environmental bonds are not appropriate for all circumstances,
building on the NEP (2006) that calls for “a judicious mix of civil and criminal processes and
sanctions” (MoEF, 2006, page 17).
22. In addition to the above priorities, there is a double benefit to regulatory agencies from
recognizing and encouraging good environmental performance and voluntary initiatives by
the industry. The Charter on Corporate Responsibility for Environmental Protection sets a good
example of a collaborative process to expand upon through some regulatory incentives, such as
extending the duration of CTO or/and reducing the frequency of inspections for industries that
demonstrated a good record of past performance, obtained ISO 14001 certification, or introduced
environmental auditing or sustainability reporting. This provides an additional (even if small)
incentive for other industries to follow and to innovate further. It also allows SPCBs to focus their
scarce resources on serial offenders and other priorities. There is a significant and under-realized
scope for providing such support, using good practice examples of a handful of SPCBs.
23. Public disclosure of environmental information and citizen participation in monitoring
have the power to motivate better compliance by holding the industry and government agencies
accountable for their performance and decisions. It is important to continue supporting citizenmonitoring efforts that CPCB/SPCBs have initiated by promoting public–private partnerships for
compliance monitoring and establishing public notification procedures for sharing relevant data.
Strengthening the Capacity of Environmental Agencies to Meet Growing Demands
24. Matching the capacity of the regulator with the multiple and expanding regulatory
mandates in a rapidly growing economy is a major challenge. There are significant capacity
constraints of State environmental agencies to meet their existing mandates, as well as the need
for introducing new regulatory programs and tools and improving the effectiveness of existing
ones. Furthermore, the pressures for processing consents to establish and operate (CTEs and
CTOs), as well as for conducting inspection visits, are increasing for most SPCBs due to continued
rapid growth, adoption of shorter timelines for approving new investments, and a larger number
of units to monitor. In addition, public interest litigation (PIL) and other court cases against SPCBs
are on the rise in many States, which - albeit a positive sign of civil activism - is further eroding the
capacity of
SPCBs to inspect and enforce as its already limited staff resources are re-allocated to dealing with
those cases. Notwithstanding that the volume and complexity of workload is growing
disproportionately to the staff, skills and resources, State governments often exacerbate the
situation by indiscriminate hiring freezes.
25. The study recommends that the MoEF and CPCB consider, using recent examples of several
SPCBs, requesting and guiding all SPCBs to develop a medium term capacity strengthening
action plan to meet the current and projected workload, including the requirements of the RTIA
and the recent increases in court cases. These plans should first explore the possible efficiency
gains through: (i) rationalizing processes (e.g. linking consent duration and inspection strategy to
environmental risks and performance of a facility); (ii) upgrading technology (e.g. full
computerization of application processing, greater use of continuous environmental monitoring
when possible); (iii) decentralizing responsibilities to regional offices, along with staff, resources
and equipment; outsourcing certain non-core functions; (iv) training to upgrade skills, etc. It
would conclude with a staffing plan including a possible need for additional positions to meet the
17
core needs, upon exhausting all options for improvements in processes and efficiency. The plan
could then be used for negotiations with State governments over additional staff positions, subject
to making a strong and verifiable case.
26. Furthermore, a system of oversight between the center and States needs to be strengthened to
ascertain greater accountability for the level of performance by State environmental agencies,
which varies greatly across states. The MoEF and CPCB could consider introducing a performancebased program of support to SPCBs, which would be rewarded for exceeding the agreed
performance targets, in addition to the “needs-based” technical assistance to SPCBs with
particularly low capacity (e.g. in new and/or poorer States). Improving efficiency and
accountability of the forests departments in providing the forestry clearance and performing
compensatory afforestation is another priority action area.
Aligning Sectoral Incentives with Environmental Priorities
27. In addition to the critical roles of the environmental regulator and the civil society, there is
also a fundamental need for sectoral agencies to facilitate better environmental compliance
and performance of individual projects, more sustainable development of the sector as a whole
and a greater cross-sectoral coordination, particularly at the planning stage. Case studies and
sector reviews show that environmental monitoring and enforcement of specific sources can do
very little to improve the situation on the ground if environmental factors are not considered at
the time of location decisions, spatial planning, project design, and technology selection. Sectoral
agencies and local governments are typically better positioned to influence these choices than the
environmental regulator.
28. The industry sector agencies can significantly influence environmental outcomes by: (i)
integrating environmental objectives in the State Industrial Policy, already done by several,
though not all, States; (ii) linking industrial promotion incentives (such as tax holidays and soft
loans) to environmental risks and performance, for example conditioning incentives on securing
an environmental performance bond by industries with hazardous processes; (iii) coordinating
with SPCBs and municipalities for better planning and zoning that integrate environmental
considerations, including the need for common environmental infrastructure; (iv) organizing
programs to raise awareness of business opportunities linked to good environmental
management, using increasing examples within India; (v) promoting partnerships between larger
industries and smaller suppliers, such as “green supply chain” initiatives; and (vi) facilitating
environmental knowledge sharing and training by business associations, particularly in
“emerging” States with massive new development investments (e.g. Chhattisgarh, Jharkhand, and
Orissa).
29. In the power sector, there is significant synergy between the three core drivers shaping
future development of the sector. These are: (i) meeting a growing demand for electricity at
affordable cost; (ii) ensuring long-term security of primary energy supply through an appropriate
mix of sources; and (iii) minimizing the environmental impacts — at the local, regional and global
level. Nevertheless, there are a number of areas where further alignment of sectoral policies
and programs with environmental considerations is required. These include: (i) a more
focused effort to promote the uptake of energy efficiency and conservation measures on the
ground; (ii) enhancing energy efficiency and environmental considerations in coal-based
generation, including the construction of new plants and the Renovation & Modernization (R&M)
program for old coal fired power plants; (iii) strengthening incentives for ash management and
use of better quality coal; and (iv) creating a stable regulatory environment for renewable energy
18
generation at the State level. It would be also useful to include environmental indicators of sector
performance in the Ministry of Power (MoP) online database and annual reports.
30. Furthermore, the recent introduction of the Net Present Value (NPV) for diverted forest land
has illustrated that environmental regulation can significantly influence the cost and tariff
structure of power generation and transmission projects, and skew the market of power
generation in favor of certain primary energy sources and technology choices over others. The
impact of the NPV payment that has been particularly felt by new hydro power projects
highlighted the need for a comprehensive and consistent methodological framework for
estimating and accounting for all relevant externalities. This would help assess the full
economic costs and benefits of alternative power sector technology choices at the project and
system level, and devise regulatory and/or financial incentives to be provided to investors in
generation that would facilitate optimal technology and/or energy source choices.
31. In the rapidly expanding highways sector the key recommended sector specific actions are:
(i) strengthen mechanisms, at both policy and implementation level, to take better account of the
indirect, induced cross-sectoral and cross-boundary impacts, based on best practices available in
India and internationally; (ii) provide technical guidance on key environmental management
aspects through sectoral Guidelines; (iii) integrate environmental management measures in the
updated construction codes and technical specifications for highways and road projects; and (iv)
develop a manual for translating provisions of the Environmental Management Plans (EMP) into
contract clauses to improve the implementation of EMP and environmental performance of
contractors.
32. The environmental agenda provides additional opportunities to support the
development of a modern and efficient sector. This is particularly evident in the power sector
but applies to other sectors as well. Around the world, national environmental requirements have
often steered technological innovation, energy conservation, management improvements, better
planning, and superior design that, in the longer term, become beneficial for sector-wise and
economy-wide performance. As concerns about global environmental issues, such as climate
change or toxic chemicals, have led (and continue to lead) to the development of international
concessional financing mechanisms, along with efforts related to knowledge, technical assistance
and technology transfer, these instruments can and should be more effectively used by India to
reinforce and advance sector development objectives and national environmental priorities. For
example, India represents one of the largest potential markets for carbon-reducing investments
under the Clean Development Mechanism (CDM). Following a meeting of G-8 countries in summer
2005, the Investment Framework for Clean Energy and Development is being developed to
accelerate investments that can meet the growing energy demands in an environmentally
sustainable manner. It is important for government agencies and private sector players in India to
become an active and informed participant of this process, highlighting the need for a countryspecific strategic assessment of “low carbon” economic growth options.
Working Across Sectors for Common Public Good
33. There are also important common needs highlighted by all stakeholders of environmental
management. Summarized below, these could be good entry points for working together and
building constructive partnerships.
Improving Access to Information, Knowledge and Training
34. There is a general consensus that all institutions — representing environmental,
sectoral, and civil society stakeholders — can play a key role in strengthening the
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knowledge base and technical capacity that are important in minimizing the environmental
impacts of development. Much of the information is already being provided by various
institutions, and it is important to focus future efforts on: (i) disseminating it more evenly across
the country; (ii) providing high and comparable quality sector-specific training across States and
organizations; and (iii) developing targeted, well-designed and well-delivered programs for
community learning.
Strengthening Cross-sectoral Coordination
35. The lack of effective mechanisms for inter-agency coordination is too often at the root of
environmental management problems, including difficulties with compliance and enforcement, as
well as failures of common environmental infrastructure. It is thus critical, for both sectoral and
environmental authorities, to evaluate, share and promote national best practice examples of
State-level policies and institutional mechanisms, as well as relevant international experience that
enable early and meaningful participation of environmental agencies in the planning and design of
infrastructure and industrial development projects. Examples from sector reviews include the
Environment and Social Management Framework for the highways sector by the Government of
Gujarat; and the efforts of the Government of Andhra Pradesh to integrate environmental
considerations into industrial development planning. The Charter on Corporate Responsibility for
Environmental Protection drawn up jointly by the industry and MoEF/CPCB is another good
example of a collaborative action to follow.
Empowering Local Governments
36. New priorities and programs, such as urban air quality action plans, programs for SME
clusters, or other area-wise pollution management programs, will require even greater crosssectoral cooperation and integration within a particular municipality or other spatial zones.
Municipal or other appropriate local governments appear to be best positioned to have the right
incentives to ensure the coordination needed. It would be thus important to provide them with
sufficient authority and capacity to forge such coordination. Devolving more powers to and
rd
th
building capacity of local governments, set in motion by the 73 and 74 Constitutional
amendments, would be necessary for developing and implementing environmental management
programs aimed at measurable improvements of environmental quality in the areas of their
jurisdiction, with the participation of all concerned sectors, as well as citizens.
The Way Forward
37. The emerging environmental agenda is of immense proportion. The needed institutional
changes and large-scale improvements on the ground will require national commitment and
consensus on a program of actions spanning over the long-term. Many of the measures would
involve further examination, design, as well as consultations with the public, other government
agencies, and the regulated community. It will also require that environmental agencies, sectoral
institutions, and the general public patiently work together to progress towards the objectives set
out in the NEP.
38. An enormous agenda is not new for India, which has on numerous occasions risen to meet
such challenges. Encouragingly, many steps and initiatives setting the right direction have been
recently taken by various players, including the environmental regulator. It would be important to
move quickly towards reaching a broad agreement with all major stakeholders on the priority
actions, starting with the identified list (Table S.1), and develop a medium- to long-term
program of implementing the agreed actions supported by necessary resources, monitorable
targets, and clear accountability mechanisms.
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