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February 2014

Taxing Environment Of Ministerial Laxity

By Tarunkumar G. Singhal, Raman Jokhakar, Chartered Accountants
Reading Time 2 mins
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Jayanthi Natarajan, it would appear, has done immense damage to the economy and to her own party’s electoral prospects. She had, it has been reported, been sitting on hundreds of files for no plausible reason, delaying their clearance for months on end, some of them for years. This amounted to criminal negligence, aborting new projects at a time of waning economic sentiment and slowing investment. It is amazing that she was given such a long rope and not relieved of her ministerial responsibility earlier. The long rope, instead of tripping her up, has choked off the economy’s oxygen supply. The fall in real capital formation as a share of GDP by about six percentage points is at the root of the slowdown in economic growth over the last several quarters.

Now, these files accumulated with Natarajan – 180 of them unsigned, 169 signed but still withheld – for reasons that the former minister has not chosen to share with the public. It is tempting to accept the charge, made by Narendra Modi, that the files piled up because of non-payment of a “Jayanthi tax”, unless Natarajan comes up with a credible explanation for this strange hoarding of vital clearances. Regardless of the explanation, the conduct has been inexcusable. The development further strengthens the case for transferring the job of according environmental clearances to an independent authority with expertise and the requisite staff strength. The environment ministry’s job should be to formulate policy and the norms that the regulator would use to accord or deny clearance, or suggest compensatory measures.

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