The future of India’s economic growth: the natural resources and energy dimension

The continuation of widespread poverty apart, the biggest danger that India faces is the wanton destruction and degradation of all the country’s natural resources and a growing, unsustainable, dependence on the use of hydrocarbon fuels. We are losing ten percent of our GDP as a result of the damage to and degradation of our natural resources. But environmental decision-making has not yet been merged with mainstream economic decision making. In the developed countries, environmental protection followed a path defined by the Environmental Kuznets curve, involving significant increases in income and pollution levels to a point where the trend changed. A developing country like India cannot pursue the same path, and would need to set up a governance structure and policy regime that allow the turning point to take place at substantially lower levels of income. The internalization of social and environmental externalities would ensure that resources are used in a sustainable and responsible manner. In the matter of energy use, for instance, proactive policies—such as stress on renewable sources and the rationalisation of subsidies—are needed to decrease the dependence on unsustainable imports and to create the conditions under which the dispossessed and poor sections of society are able to meet their basic energy needs. Blindly aping the consumerist approach of the developed world, and neglecting the ecological footprint of lifestyles, could prove disastrous for our populous country. # 2004 Published by Elsevier Ltd.