Pollution control boards aren’t underfunded but investing their surplus into fixed deposits: Report

A research paper released on April 28, 2023, has raised questions as to whether State Pollution Control Boards and Pollution Control Committees (SPCBs/PCCs) in India are effectively fulfilling their mandate to control pollution.

The paper, titled The State of India’s Pollution Control Boards: Are they in the green? is the fourth released by public policy think tank Centre for Policy Research (CPR) in its series The State of India’s Pollution Control Boards.

It found that 10 SPCBs/PCCs, all in the Indo-Gangetic Plain (IGP), had invested their annual substantial surplus in the form of short, medium-term fixed deposits to the tune of Rs 2,893 crore as of March 31, 2021. The amount should ideally have been invested in manpower, infrastructure and equipment.

This, the paper noted, showed that while many SPCBs are adequately financed, it does not necessarily ensure that they perform their functions effectively.

Conflict of interest?

The paper has been authored by Bhargav Krishna and Annanya Mahajan from CPR and Shibani Ghosh, environmental lawyer and former fellow, CPR, among others.

The authors sought information on the finances of nine SPCBs and one PCC, all located in the IGP of north India, through RTI applications.

The information is related to the revenue and expenditure of the Boards for three financial years: 2018-19, 2019-20, and 2020-21. Later, all information received was categorised into a standardised template based on formats found in annual reports.

A majority of the Boards examined were found to generate nearly half of their revenues by issuing polluting industries no objection certificates and granting consent to establish and operate, the authors found.

This is because central government funding while regular, is inadequate as it is provided only for existing centrally sponsored schemes.

On the other hand, consistent funding from state governments is largely non-existent. The authors found that no financial support was provided by state governments to their respective SPCBs/PCCs in all but two states.

“As Boards can no longer charge water cess, licensing and consent fees along with interest income accruing from investments are the sole revenue generation mechanisms of the Boards,” the paper noted.

This creates a structure where the Boards are incentivised to focus as much of their attention as possible toward consent management as this is their sole consistent source of revenue.

Most of the Boards studied struggled to spend the entirety of the surplus they generated for each of the three years. Pay and allowances for staff comprise over half of SPCB/PCC expenditure, with some skewing upwards of 80 per cent.

Despite the poor state of infrastructure in many states, spending on new infrastructure including lab facilities is low, with some exceptions. Spending on research, development and studies comprise a tiny fraction of overall expenditure across the board. 

All this led to the surplus being invested into fixed deposits.

‘An eye-opener’

At a panel discussion during the launch of the paper, experts pointed out the areas that need immediate attention.

Ajay Narayan Jha, former member of the 15th Finance Commission and Pratima Singh, senior research scientist and head, Centre for Air Pollution Studies, highlighted the fragmentation of  government machinery.

Many of the 20 current and former leadership and staff of the CPCB and SPCBs across IGP states had appreciated the National Green Tribunal’s order empowering SPCBs to impose environmental compensation.

This, they had told the authors, provided a much-needed replacement for revenue lost when the water cess was subsumed under the GST regime.

But, as Singh pointed out, SPCBs had responsibility without power.

She noted that usually urban local bodies (ULBs) are vested with too much power and responsibilities in a city but lack clarity on how to allocate the latter among departments under such a structure or framework:

For instance, in Karnataka – initially the ULB thought the fund for clean air had to be utilised by them and only after 2.5 years they realised they have to allocate money to the departments that hold responsibility to bring down air pollution levels. SPCB, however, has been instrumental in stating the concerns of the departments (regulators) under National Clean Air Programme. Hence, since the framework is lacking, SPCB is held responsible but lacks power.

The paper noted that the proposed amendments to the Air Act and the Environment Protection Act in the Jan Vishwas Bill currently tabled in Parliament envision significant changes to the regulatory regime.

Adjudicatory powers will be placed in the hands of central government-appointed bureaucrats and fines accruing to the environment protection fund of the Centre, if the bill becomes law.

“It is unclear at this stage (in the absence of any appended rules) what this means for the current regulatory regime and the role of SPCBs. It would no doubt have ramifications on their role in the regulatory state and affect their ability to generate revenue from environmental compensation,” the document stated.

It called for greater debate around what form SPCBs take and what role they have in a forward-looking regulatory regime that aims to substantially reduce air pollution from current levels by leveraging modern approaches and regulating at the level of airsheds, not States.

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