The Budget Naturally!

Posted by: Bittu Sahgal on

It's budget time for India and every industrialist is in Delhi, lobbying for tax benefits, sops and policies that can be reflected on their balance sheets. This has been the pattern for six decades now. It's how most fortunes were accumulated by the largest Indian corporations.

If short term economic gains are not replaced by a longer-term ecological and economic vision, India will probably end up as an economic basket case because our large population cannot be sustained for more than a year or two if the mismanagement of our natural resources continues apace in this era of climate change.

The very first thing I would like to see in India's Union Budget 2012-13 is some sign that our government recognises climate change as a serious threat to our survival. In the years ahead, perhaps around 25% of our national budget will have to be invested in countering climate change and the sooner we start walking this path the better. The best sign, possibly the only genuine step in this direction, would be a cut in subsidies, coupled with tax disincentives for carbon energy. And this would need to be coupled with larger subsidies and tax incentives for non-carbon energy.

Additionally, I would like to see the Finance Minister recognise that India's economy sits on a bedrock of ecological stability. Towards this end, the wildlife we seek to save must be recognised as our Gardeners of Eden, for these species maintain and often craft the biodiversity-rich ecosystems so vital to our climate security. Digging cheap coal, or bauxite out from under natural forests may help window dress his budget, but it amounts to selling India's family ecological 'silver'. The loss of ecosystems will drive our people into penury. This is a concept that all but the most enlightened economists and bankers fail to grasp.

Here are some home truths.

POWER: Our hydroelectricity comes from rivers that originate in forests. If the forests are degraded, as most already are, siltation and irregular water flows will adversely impact the cost-benefit ratio of the huge investments already made in this infrastructure. We should have started investing in efficiency decades ago, but this, to our great cost, remains the step child of our Planning Commission. And, of course, no country, not even France, has actually been able to produce nuclear energy at a profit. That is a story unto itself and the many anti-nuclear campaigns we see unfolding in India will force our government to wake to the reality that nuclear power is no solution.

FOOD SECURITY: Our GDP is greatly enhanced from wild fish caught in our oceans. Between toxic discharges, reclamations and rising seas, the breeding ground of marine species are being obliterated unsung. If he were to ask any fisherman our Finance Minister would learn that the fish nets have already started coming up empty. Similarly the commons, including grasslands, lakes, forests and rivers produce foods that are consumed before reaching markets. But this does not even register as a blip on the calculators of the GDP brigade. There is more. High temperatures have begun to cause soil moisture loss, which affects farm output. Farmers are also adversely affected by rains that are either too scanty, or too much, plus the arrival of the monsoon too early or too late. It is next to impossible for farmers to know when to sow... little wonder that a quarter of a million Indian farmers have committed suicide. I would love to see social activists running campaigns to raise the awareness of climate change amongst farmers and fisherfolk, because our government is certainly not doing this vital job for India.

HEALTH: Enhanced humidity and higher temperatures are causing vectors to metamorphose and our immune systems cannot keep pace. Add to this the attitude of economists, the administration and politicians to pollution problems, and you end up with a nation of one billion souls, subsidizing the profits of the super rich at the cost of public health.

Such issues will have financial implications for India. But most economists cannot come to grips with this reality because they have neither measured the financial contribution of ecosystem services (coasts, rivers, lakes, forests), nor valued lands that sustain millions. This is why millions agitate when SEZ's and commercial developments displace them. India's protected area network of sanctuaries and national parks are in truth, among other things, preventive health infrastructures that ensure clean water and pure air for a nation where these two life-saving commodities are becoming increasingly rare.

The Prime Minister, Finance Minister and the Deputy Chairman of the Planning Commission need to accept that in the long run, short-term GDP growth is no measure of the well-being of a nation (probably never was). The sooner this penny drops the better.