New Delhi – The understanding of sustainability has evolved from a philosophical expression into a business proposition in today’s context. India is working to redefine the way growth is measured; the ecological and environmental costs also need to be factored in. The year 2015 has been set as a target date by which the Indian GDP will be reported as Green Domestic Product instead of the conventional way, said Mr. Jairam Ramesh, Minister of State (Independent Charge) for Environment & Forests, speaking at the opening plenary of the “5th Sustainability Summit: Asia 2010, Remodelling Growth”, organized by the CII-ITC Centre of Excellence for Sustainable Development. The last two decades witnessed measures by India to take care of the fiscal sustainability of its growth. The focus now has to be to also ensure the ecological sustainability of its growth.
One needs to look at “Genuine Wealth”, added the Minister, as he informed the audience about the study by Partha Dasgupta of Cambridge University. In the period 1970-2000, even though the per capita GDP of India grew at 3%, the genuine wealth grew at 0.3%. The World Bank in a report released in 2008 had stated while the national savings rate was 34% of the GDP, the adjusted savings rate was 24% of the GDP. This takes into account the environmental costs, which also resulted in the real annual growth of India’s GDP being lowered from 8% to 5.5%.
While current incentive structures are skewed towards financial returns only, Ramesh suggested having incentives to reward and stimulate sustainability is the only way forward. The challenge is to get consumers also to understand sustainability. This process demands tough and unpopular decisions to be taken. A case in point was the diesel subsidy intended for the farmers, but being taken advantage of by the luxury diesel cars. While countries like China have copied the Western economic model, India is uniquely positioned to develop its own path.
The topic of climate change was more political than scientific at the international platform. Nevertheless, it offers an opportunity to India; businesses could become technology providers rather than be seen as technology seekers. Ramesh observed India had slipped from being a leading provider of technology relating to photo-voltaic, clean coal, N-power and solar and wind energy. Therefore, the bigger challenge now is about appropriate domestic actions, and about being sustainable today rather than talking only about tomorrow.
The need to have a rebalancing of incentives and disincentives was underscored by the Minister. He went on to say the Government of India was setting in place “Green Bonus” for states through the 13th Finance Commission; for the first time upto Rs. 5,000 crores was to be given for sustainable forest cover over a 5-year period. Also, the formula for disbursement of funds from the Planning Commission to the states was being changed to encourage states to perform better with respect to their environment and forests. He also lauded the businesses for their work under corporate social responsibility.
Speaking earlier, Mr. Y. C. Deveshwar, Past President – CII, Chairman – CII-ITC Centre of Excellence for Sustainable Development and Chairman – ITC, dwelled on the theme of the Summit – Remodelling Growth – and stressed on the need to renew the trust and awakening on sustainability. Though the world’s GDP multiplied 60-times in the last 50 years to now reach a level of over $ 60 trillion, two-third of the world still lives in poverty and over a billion people in acute deprivation. In short, scant attention has been given to building the natural or ecological capital, as well as the social capital. Sharing the experience of his own company, Mr. Deveshwar exhorted businesses to play a greater role to add to their own competitiveness. He further stressed on the twin needs: to have incentives and disincentives, as well as to educate consumers. All of this was possible only if there was a way to forge partnerships between the industry, government and the people.
The other speakers at the plenary were Ms. Agatha Sangma, Minister of State for Rural Development, Government of India, and Mr. T. N. Ninan, Chairman and Editorial Director, Business Standard. The session was moderated by Mr. Tarun Das, Former Chief Mentor of CII.
The Summit was attended by over 350 people, including experts, from industry, government and civil society from India several countries across the world.
About CII-ITC Centre of Excellence for Sustainable Development
The CII-ITC Centre of Excellence for Sustainable Development is an institution that creates a conducive, enabling climate for Indian businesses to pursue sustainability goals. It creates awareness, promote thought leadership and build capacity to achieve sustainability across a broad spectrum of issues. For more information, visit www.sustainabledevelopment.in.
Source: Press Release dated November 30, 2010, from CII-ITC Centre of Excellence for Sustainable Development.
