The Central government is attempting to drive the States' fight against pollution with a series of carrot-and-stick measures, many announced on Tuesday at a meeting of Pollution Control Boards. While money will be doled out to States which take environmental concerns seriously, defaulting States could find their polluting industries shut down.

From the next fiscal year, about 2 per cent of the money that the Planning Commission transfers to States annually will be dependent on their environmental performance. “A total of Rs. 1,800 crore is at stake…This is a significant amount of money,” said Environment Minister Jairam Ramesh, dangling a carrot.

A proposed World Bank scheme to build capacity in Pollution Control Boards will be “implemented with strict conditionalities,” said Mr. Ramesh. The Rs.1,300-crore project was expected to become operational next year, but States would get the money only if they implemented reforms in recruitment and work procedures and upgrade instrumentation facilities.

Performing States will receive a suitable reward. Gujarat and Tamil Nadu, which already have an online pollution monitoring system, were chosen for a pilot project on a market-based mechanism to control air pollution. As The Hindu reported last month, the pollution permit project to be implemented in coordination with MIT scientists would involve a cap and trade system.

The Centre is also wielding the stick in several areas. In January, it slapped a moratorium on new projects or expansion of existing projects in 43 critically polluted industrial clusters across the country. That moratorium was supposed to end on Tuesday, but the Environment Ministry has extended it by another two months, till October 31.

Only 16 clusters have submitted action plans to clean up and prevent further pollution, and only nine have been evaluated so far. “Once they start putting in the money to implement those plans on the ground, the moratorium will be lifted,” said Mr. Ramesh.

However, he warned States which have “submitted action plans running into thousands of crores thinking that there is some new Centrally-sponsored scheme.” The Minister made it clear that the “polluter pays” principle would be enforced, with industrial units themselves expected to bear the primary cost of cleaning up. The State and Central governments could pitch in with common infrastructure and effluent treatment plants.

With regard to the Ganga, the Centre has run out of patience. “Today, we have taken a decision that we cannot wait for the State Pollution Control Boards only to carry out action against industries polluting the river,” Mr. Ramesh told journalists.

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