A Cross-State Analysis on the Relationship between Environmental Quality and Human Development in India

Sacchidananda Mukherjee, National Institute of Public Finance & Policy (NIPFP)
Debashis Chakraborty, Assistant Professor, Indian Institute of Foreign Trade

Abstract

The article attempts to analyze the relationship between Environmental Quality (EQ) and Human Development (HD) for 14 major Indian States during 1991-2004. For understanding the temporal changes in EQ, the sample period is divided in two: Period A (1990–1996) and Period B (1997–2004). For both the sub-periods, 63 environmental indicators have been clustered under eight broad environmental groups and an overall index of EQ is created using the HDI methodology. The EQ ranks of the States exhibit variation over time, implying that environment has both spatial and temporal dimensions. Ranking of the States across different environmental groups show that different States possess different strengths and weaknesses in managing various aspects of EQ. The HDI rankings of the States for the two periods are also constructed by the HDI technique. The regression results involving individual environment groups and HDI score of the States indicate a slanting N-shaped relationship between the two. The article concludes that individual States should adopt environmental management practices based on their local (at the most disaggregated level) environmental information.