Developed countries in particular are now addressing environmental concerns directly through their budgets, making it a powerful statement of the government's environment policy. In a developing country like India, where the primary concern for budget makers is to arrest mounting debts and large fiscal deficits through rapid economic growth, the environment often gets neglected in the process.

Recently, the Tata Energy Research Institute (TERI) had organised a conference on Greening the Budget: Impact on Industry and Economy-A Pre-Budget 2000-01 Debate. The conference focussed on issues in the mostpertinent sectors, including industry, energy, agriculture, forestry and biodiversity, residential and transport.

``We continue to subsidise scarce resources such as energy and water, and are unmindful of the increasing waste and inefficiency. Nor have we considered incentives to users to manage resources,'' said Dr R K Pachauri, director, TERI. Elaborating on the hidden costs of degradation, Pachauri pointed out that the annual loss to agricultural output due to soil degradation alone is estimated in excess of 10 per cent.

Regarding the transport sector, R K Singhal, principal advisor, Rail India Technical and Economic Services, said that there is first a need to develop an adequate mass transport system. ``Fiscal measures alone cannot be considered in isolation. The implication of the transport policy should be fist looked into,'' he cautioned.

The final recommendations of the group regarding transport supported cleaner fuels and eco-friendly modes of transport via fiscal and financial measures, forinstance, freight transport for pipelines and waterways. It was also stressed that anomalies in the tax structure need to be addressed so that it is not further complicated and social issues like universal availability of public transport are accounted for.

Commenting on the energy aspects of the budget, Dr S Narayan, secretary, ministry of petroleum and natural gas said there is no coordinated energy policy for the country. ``Especially with respect to the hydrocarbon sector, the question of meeting demand in a consumer-friendly manner has to be addressed,'' he said.

It was also recommended that the budgetary implications for the government of strategies to reduce pollution in the industrial and energy sectors be adequately brought out. ``This would help in segregating policies on the basis of whether they are self-financing, need budgetary support or are capable of generating a surplus,'' said Dr Partho Shome, RBI professor, Indian Council for Research on International Economic Relations.

Taking a cuefrom TERI's presentation on the forestry and biodiversity sector, former inspector general of forests A K Mukherjee emphasised that forestry's contribution was not reflected in the GDP as more than Rs 30,000 crore worth of forest products are given away free to the people in the form of fuel, fodder and medicinal plants. He stressed the need for increasing the budgetary allocation for the forestry sector from 1 to 3 per cent, saying, ```Only Rs 1,000 crore a year are given for replanting and regeneration of forests where the need is for Rs 5,00 crore.''

The recommendations for the agricultural and residential sectors stressed the need to rationalise fertiliser subsidy as well as power prices for minor irrigation and address issues such as who benefits from power subsidy. It was also recommended that user charges for water, sanitation and sewage disposal need to be revised, where part of the proceeds are used to improve the quality and regularity of water supply.