Privatisation of Natural Resource-Based Sectors, Ease of Doing Business, and the Law

In 1991, several sectors of the Indian economy which hitherto were more or less the exclusive domain of the public sector were opened up to private players, including global corporates. This was accompanied by a series of changes to the related policy, legal and regulatory regimes. This process has continued in the decades that followed. These policy, legal and regulatory changes, though mainly in the sectoral and financial domain have had significant implications for environmental, social and livelihoods impacts of activities in these sectors. This article proposes to trace some major changes in the legal, regulatory and governance frameworks which have had significant environmental, social and livelihood implications in three key sectors – water, electricity generation and coal mining. It shows how this shift in the legal regime has been driven mainly by the objective to promote “ease of doing business”, leading to neglect of social and environmental concerns. The article also documents how this thrust to prioritise business leads to more tolerance of non-compliance of environmental laws and creates pressure for their dilution. Last but not the least, the article highlights how compliance with environmental laws and regulations often needs actions that are under the purview of the financial and economic regulations and institutions. It argues for a proper understanding of this link and for designing sectoral, economic and environmental laws in a manner that they strengthen each other