The role of the government in directing the economy is being increasingly eroded, due to greater emphasis being given to privatisation. The neo-classical assumption that “market forces” can help to achieve equilibrium, and that the private sector would be more efficient in achieving various economic goals, is leading to greater importance being given to it in the economic life of the country.
However, various imperfections in the market lend doubt to the veracity of the perfect working of the market, and the “efficiency” of the private sector. This is all the more glaring in case of environmental effects. There is ample proof that market failure leads to environmental deterioration, and validates the greater need for stricter governmental control to protect the environment. Hence Planning cannot be subservient to privatisation in the case of environmental protection.
In India, the liberal industrial climate has resulted in increasing industrial pollution, as environmental laws are subservient to economic and industrial laws. This is especially true in the case of the spatial distribution of polluting industries that tend to cluster in certain regions to take advantage of locational benefits. Unfortunately, the Govt also encourages such zones in the name of “Industrial parks” or “estates”. These estates are usually located outside the main residential area of a city and provided with good transportation access, including road and rail. Although they are set up outside urban areas to reduce the environmental and social impact within the city limits, the concentration of a large number of polluting units results in large scale pollution in these areas. Agglomeration of similar types of industries, though leading to external economies of scale, also leads to external diseconomies in the form of pollution and environmental degradation. This leads to localised pollution and environmental problems that are spread unevenly over a State or country.
In this paper we examine the regional patterns in the distribution of polluting industrial units in Andhra Pradesh. We also analyse the industrial pollution intensity and industrial pollution exposure rates over different districts and regions of AP.
Andhra Pradesh is the fifth largest in terms of area, and is among the top 10 industrialised states in the country, having around 11.44% of total industrial units in India in 2007 (CSO website). The industrial development of AP accelerated during the period 1975-1985, when various Industrial Estates were formed under the aegis of the Andhra Pradesh Industrial Infrastructure Corporation Ltd. A variety of subsidies as well as Sales Tax exemptions were given to the industrial firms to encourage their growth. Under the Industrial Investment Promotion Policy for 2005-2010, a slew of incentives for the growth of the industrial sector were further initiated. [GOAP, www.aponline.gov.in]
The State specialises in Drugs and Pharmaceuticals, and Hyderabad-Medak region in AP is considered to be the “Bulk drugs capital” of the country. Pharmaceutical production from this region accounts for around one third of India’s total bulk drug production. In 2005, the Government of Andhra Pradesh developed the Jawaharlal Nehru Pharma City at Parwada near Visakhapatnam, to further promote the growth of the pharmaceutical industry. Further, (SEZ) Special Economic Zones are being promoted at Visakhapatnam and Kakinada, and leather and chemical parks are also on the anvil in these regions. [GOAP, www.aponline.gov.in]
AP has attained global notoriety for its large scale industrial pollution [www.greenpeace.org]. AP is the third most polluted State in India, in terms of Industrial Pollution [CPCB Annual Report, 2004-05]. Out of the 24 industrial pollution hotspots identified by the CPCB in 1991, four were in AP [www.cpcb.nic.in]. In Dec 2009, a Comprehensive Environmental Pollution Index (CEPI) was formulated by the CPCB, in consultation with the Ministry of Environment & Forests, to identify highly polluted industrial clusters in India [www.cpcb.nic.in]. Out of 88 industrial areas or clusters selected for the study across the country, five are in AP1.
In 2006-07, around 59% of large and medium scale Red industries in AP, belonging to the 17 most polluting categories, i.e. Red industries, were not compliant with pollution regulations. Also six percent of all hazardous wastes of India were produced in AP (495,985 tonnes/annum) in 2006-07 by 1,583 industrial units. The state also has the largest number of illegal dumpsites for hazardous wastes (40 sites) in the country [CPCB Annual Report, 2006-07].
However, the polluting industries are not equitably distributed, and there is grouping of different types of polluting categories of industries in different regions of AP. This leads to localised environmental impacts of industrial activity.
Objective of the Study
In this study we aim to estimate the ‘disparity index’ of location of different pollution categories of large and medium industries units in the districts and regions of AP, for the year 2007. We also attempt to find out the pollution intensity, and the pollution exposure rate, to gauge the relative area and population exposed to pollution from these industrial units. This will help to identify those regions in AP that are highly affected by industrial pollution. The study is based on the operating large and medium scale industries belonging to the three categories of pollution identified by the CPCB – Red, Orange and Green. Unfortunately pollution status of small scale industries is not available in the state.
Sources of Data: Cross section data of 8296 medium and large industrial units in AP for the month of September 2007 is taken from the online publications of the Andhra Pradesh Pollution Control Board (APPCB). The Board gives the number of operating, closed and sick industrial units in the three polluting categories (Red, Orange and Green) for 25 districts of AP, grouped under five Zones [www.appcb.org]. Data on other variables is taken from various CPCB and APPCB Annual reports, from the Government of AP website, www.aponline.gov.in and from CSO, ASI online publication.
1) Disparity Index (DI): While there are many measures of regional disparities in location of industries (Hirschman-Herfindahl index, Entropy index, etc.) we use the Disparity Index. We use this index to show the differences in location of polluting industrial units across these five zones, as well as among the districts of AP:
Region’s share in units of a certain pollution category
DI = --------------------------------------------------------------------------
Region’s share in total operating units
This Index shows whether a region’s share in a particular polluting category of industries exceeds or is less than its share of total operating units in the State. For instance, if a region has 60% of all industrial units belonging to a particular polluting category (say Red), and it has 40% of the total industrial units in the State, then its DI will be: 60/40 = 1.5
2) Pollution Intensity (PI): One measure of concentration we put forth in this paper is based on the area of the region/district being studied. It measures the pollution intensity per thousand sq. km. This measure stems from the idea that the area over which industrial units are spread decides the ability of the region/district to ‘bear’ pollution. The larger the area, the greater the volume of air/water/land that can absorb pollutants. An area of one thousand square kilometres will have half the ability to carry pollutants than an area of two thousand square kilometres. We thus define PI as:
Number of polluting units of different categories of a region
Pollution intensity =-------------------------------------------------------------------------------------
Area of the region
3) Exposure Rate of Pollution (ERP): A second measure of pollution intensity is based upon population density. Between two regions with the same pollution intensity per thousand sq. km., the one with a larger population density will be more vulnerable to the effects of pollution. Population density is taken from the 2001 census for this purpose. We call the measure the “Exposure Rate to Pollution”.
(Regional Pollution intensity) × Regional pop’n density
Exposure Rate of Pollution =----------------------------------------------------------------------------------
1000 sq km
Data given by APPCB on the status of large and medium units in AP belonging to the three polluting categories in 2007 is given in Table 1.
It can be seen that only 6675 units belonging to the three pollution categories were operating in AP in September 2007. We hence base our analysis only on these units, as the other units were non-functional at the time of our study.
Share of Regions in Polluting Categories: For the purpose of analysis in this paper, we reclassify the districts in the state of Andhra Pradesh into five regions: Hyderabad and Ranga Reddy, other Telengana Districts, Rayalseema, North Coastal Andhra consisting of Vishakhapatnam, Vizianagaram and Srikakulam, and South Coastal Andhra region containing all the remaining districts of coastal Andhra.
We first of all look into the distribution of the 6675 large and medium operating industrial units across the five regions of AP, in terms of polluting category in 2007. We first look at the share of each region in each polluting category of industry (Figure 1).
We can see that:
• Hyderabad (+RR) and other Telengana districts have the largest share in Red industries with 30-31% each of the total Red units in the state. South coastal Andhra follows with 21% of the Red units in the state. Rayalseema, and North Coastal Andhra come a distant third with 8-9% each of the Red units in the state.
• South coastal Andhra has the largest share of Orange units in the state at 38%. It is followed by Other Telengana which has nearly 22%. All the other three regions have 12-15% each of the Orange industries.
• More than half of the Green industries are in Hyderabad (+ RR) and over ¼ in Other Telengana. Thus together, these two regions contain over ¾ of the Green industries. Rayalseema has a negligible share in Green industries, while south coastal Andhra has 14%. North coastal Andhra has a very small share of about six percent in the Green industries in the state.
Disparity Index: Inter-Regional Disparities
One limitation of looking at the share of each region in the total number of units is that the estimated shares may be affected by the total number of operating units in the region. For instance, Rayalseema may have a small share of Green units because it has much fewer industrial units than other regions of the state. Hence, it makes sense to correct for the number of operating units in each region.
For this purpose, we develop a disparity index for the share of each region in units of each category. This index is the ratio of the region’s share in units of a certain category divided by its share in total operating units.
If the index is equal to or nearly one, then the region’s share is on par with its share in operating units of the state. If it is more than one, then its’ share in that category exceeds its share in operating units of the state. If it is less than one, then its share in that category is less than its share in operating units of the state.
It can be seen that the share of Hyderabad (+RR) Green industries is more than proportionate to its share in total industries in the state. Specifically, it is 2½ times its share in total units in the state. Its share in Red industries is 1½ times its share in total operating units in the state. However, its share in Orange industries is below par, at 0.6 times the share of operating units. Thus, Hyderabad (+RR) is far more Green and Red than due, and far less Orange than due to its share in the number of operating units of the state.
In case of other Telengana districts, we find that their share in Green industries is on par with their share in total operating units of the state. The share in Red units is 1.2 times the share in operating units, while the share in Orange units is 0.9 times the share in operating units. Other Telengana districts are mildly more Red than due, on par with Green, and mildly less Orange than is due to their share in operating units of the state.
In case of Rayalseema, we find that their share in Orange units is 1.1 times their share in total operating units. However, the share in Red units is 0.8 times the share in operating units, while the share in Green units is only ¼th its share in operating units in the state. Thus, Rayalseema is mildly more Orange than is due, and mildly less Red than due, and extremely less Green than is due to its share in operating units of the state.
South and north coastal Andhra have similar attributes as can be seen from the figure and can be clubbed together for purpose of discussion. Their share in Orange units is 1.2 times their share in operating units. Their share in Red units is more than 2/3rd their share in total operating units of the state, while their share in Green units is less than half their share in operating units of the state. Thus coastal Andhra is mildly more Orange than due, less Red than due, and extremely less Green than is due to their share in total operating units of the state.
Intra-regional Shares of Pollution Categories — Incidence of Polluting Units:
We now look at the shares of different pollution categories within each region. This can be termed as Incidence of Polluting units, as it shows the distribution of polluting units within each region.
Figure (3) shows that almost half of the 1177 operating units in Hyderabad & RR are Red. The Orange and Green units are a quarter each of the total operating units in this region. Thus, Red and Orange units together account for ¾ of the operating units, while ¼ are Green.
Rayalseema is the least industrialised. However, of the 681 operating units, Red units account for 33% of the total in Rayalseema. Orange industries account for 63%, while Green industries account for a negligible proportion of the operating units. Thus, almost all industrial units in Rayalseema are polluting.
South and north coastal Andhra regions display a striking similarity in the incidence of the three types of units. Of the total operating units, nearly 2/3 are from Orange industries. Over ¼ (26-27%) are Red. Only 5-6% of the total operating units are from Green industries.
Exposure Rate to Pollution:
The above analysis, although interesting, does not reveal those districts and regions that are more vulnerable to industrial pollution.
As mentioned above, two measures of pollution vulnerability of regions/districts are adopted.
1. Pollution Intensity: One measure is based on the area of the region/district being studied. It measures the pollution intensity per thousand sq. km. This measure stems from the idea that the area over which industrial units are spread decides the ability of the region/district to ‘bear’ or ‘endure’ pollution. The larger the area, the greater the volume of air/water/land over which pollutants can be dispersed. An area of one thousand square kilometres will have half the ability to carry pollutants than an area of two thousand square kilometres2.
Number of polluting units of different categories of a region
Pollution intensity =-------------------------------------------------------------------------------------
Area of the region
2. Exposure Rate of Pollution: A second measure of pollution intensity is based upon population density. Between two regions with the same pollution intensity per thousand sq. km., the one with a larger population density will be more vulnerable to the effects of pollution3. Population density is taken from the 2001 census for this purpose. We call the measure the “Exposure Rate to Pollution”.
Exposure Rate of Pollution = (Regional Pollution intensity/1000 sq km) × Regional population density
In order to assess the vulnerability of districts to industrial pollution, we need to give pollution weights to units of different categories. Such weights (for instance BOD levels of industries) are not available in published literature.
However we find that the fees/penalty charged by the APPCB for units of different pollution categories varies in the proportions: Green: 1::Orange: 1.5:: Red: 2. We adopt these weights for better measures — i.e. taking the weight of Green as unity, we assume that the pollution intensity of Orange is 1.5 times that of Green, and Red is 2 times that of Green.
The above weights to pollution categories solve the problem of relative weightage to units of different pollution categories. But it does not measure the absolute amount of pollution. As a result, the measurement of pollution can only be relative.
For this reason, we take the pollution intensity of the least polluting region/district as the norm, and measure pollution intensity of other regions/districts relative to that. In most indices, the region’s level is measured against the State’s average. However, since we are interested in the disparities of pollution vulnerability between regions, we compare each region with that of the lowest ranking region, to show the variability of pollution exposure.
We find that the pollution intensity as well as the pollution exposure rate is the lowest for Rayalseema. Hence these are set as the norm, and the pollution intensity and pollution exposure rate for other regions are measure relative to Rayalseema in cols. 4 and 5 of the Table 2.
With these assumptions and weights, the pollution per thousand kilometres of a region, which we may call the “Vulnerability Index” is calculated and presented in Table 2. Since Rayalseema has the lowest level of pollution intensity, we take this as the norm (weight =1), and compare the other regions against it, to rank them according to their vulnerability index:
• Hyderabad (+RR) tops the pollution intensity with a score of 19 times that of Rayalseema. Also because it is far more densely populated than Rayalseema, its relative pollution exposure rate is 90 times that of Rayalseema.
• South and North Coastal Andhra regions come second with a relative pollution intensity of 2.5-3 times that of Rayalseema, respectively. Their pollution exposure rates are 4.5−5.5 times that of Rayalseema, respectively.
• Other Telengana districts have very low pollution intensity and exposure rates, which are just 1½ times that
This analysis suggests that the focus for anti pollution drives should first be on Hyderabad (+RR), followed by coastal Andhra region. Telengana and Rayalseema when considered as a whole seem to be less vulnerable and less exposed to pollution.
Analysis at the District Level:
The question that arises is whether this finding survives disaggregation into districts. For finding this out, we measure the pollution intensities and exposure rates at the district level.
The estimates of pollution intensity and exposure rates are reported in Col (2) and (3) of Table 3. Since the estimates are based on an arbitrary norm, the corresponding estimates of Rayalseema reported in Table (2) earlier are taken as the norm and the relative magnitudes of pollution intensity and exposure rate are reported in cols. 4 and 5 of the table. The districts have been arranged in descending order of relative pollution intensity for each region. This is done to focus attention on the problem districts within each of the five regions.
Districts by Exposure Rate
1. Hyderabad and Ranga Reddy districts top the problem districts. Hyderabad has a relative pollution intensity that is 100 times that of Rayalseema and an exposure rate that is 10,000 times that of Rayalseema thanks to an extremely high density of population. It is followed by Ranga Reddy that has a relative pollution intensity of 7.5 times and an exposure rate that is 16.5 times that of Rayalseema.
2. In South Coastal Andhra Regions, East Godavari and Krishna are the most vulnerable to pollution. They have pollution intensities that are 4.3 times and exposure rates that are nearly 10 times that of Rayalseema. Industrial Pollution control efforts in these regions must start with these two districts. West Godavari and Guntur districts come next with pollution intensities of 2.7-3.7 times Rayalseema, respectively and relative exposure rates of 6.5-7 times that of Rayalseema. It can be noted that the relative exposure rates are much higher than the pollution intensities, because the population densities in these districts is much higher than in Rayalseema. For this reason, these districts also merit attention in efforts to control industrial pollution. Of the remaining, Nellore and Prakasam are the least problematic with pollution intensities and exposure rate less than 1.5 times and even less than Rayalseema respectively.
3. In North Coastal Andhra Regions, Srikakulum ranks highest with a relative pollution intensity of 4.2 and a relative exposure rate of nine. Vishakhapatnam and Vizianagaram come next with relative pollution intensities of three and 1.8 respectively and relative exposure rates of five and three respectively. All north coastal districts have relatively high rates of pollution intensity and pollution exposure rates.
4. In the case of Other Telengana districts, we noticed earlier that the relative pollution intensities were only 1.5 times that of Rayalseema. However, when we disaggregate data at the district level two to three districts stand out as having a higher level of relative pollution intensity and exposure rates.
It can be seen that Medak tops the region with a relative pollution intensity of 2.5 that of Rayalseema, and an exposure rate that is even higher — viz., 3.5 times that of Rayalseema. Karimnagar comes next with a relative pollution rate of 1.9 times and relative exposure rate of 2.8 times that of Rayalseema. Nalgonda is the third in the problem list with a relative pollution rate of 1.7 times and a relative exposure rate of 1.9 times that of Rayalseema. The relative pollution and exposure rates of the remaining districts in the region fall in the zone of 1-1.5 times that of Rayalseema, and therefore can be considered to be less problematic.
5. Finally, in Rayalseema, it appears that Chittoor can be identified as a vulnerable district, since it has relative pollution intensity of 1.7 and a relative exposure rate that is somewhat higher at two times the regional average. Hence, industrial pollution efforts in this region can focus on Chittoor.
It can be seen that the pollution per thousand square kilometres is lowest for Rayalseema 14/1000 sq.km of geographical area. This is the equivalent of seven Red units in thousand square km.
Districts by Pollution Intensity
The pollution intensity in Hyderabad (+RR) is the highest. It is 18 times the pollution intensity of Rayalseema, and stands at the equivalent of 144 Red units per thousand square kilometres.
The pollution intensity in other Telengana districts is higher, being 1½ times that of Rayalseema, standing at about 10 Red units per thousand square kilometres of geographical area.
In south and north coastal districts the pollution intensity is 2.5 to 2.8 times that of Rayalseema respectively, standing at 17 and 19 Red units per thousand square kilometres of geographical area.
Our analysis reveals that the pollution load of Hyderabad (+RR) is unacceptably high. Outside this, pollution intensity in north Andhra region is also high, being more than 2½ times that of Rayalseema. Comparatively, other Telengana districts and Rayalseema enjoy a lower degree of pollution per thousand square kilometres.
Ranking of Districts by Pollution Intensities:
We now estimate the pollution intensities by district, taking the least polluted district: Adilabad’s pollution intensity as the norm.
• It can be seen that Hyderabad tops the list with a pollution intensity of 138 times that of Adilabad.
• Ranga Reddy comes next with a pollution intensity of 35 times Adilabad.
• Krishna and E. Godavari occupy the next ranks with a pollution intensity of 8.5-9 times Medak, Srikakulam and Guntur come next with pollution intensities of 7-8 times that of Adilabad.
• Vizag ranks 8th in the districts with a pollution intensity that is six times that of Adilabad.
• West Godavari ranks 9th with a pollution intensity of 5.5 times that
• Nalgonda, Karimnagar, Vizianagaram and Chittoor take the 10-12 rank with pollution intensities that are 3.5-4 times that of Adilabad.
• The remaining districts have relatively low pollution intensity.
If we take the top 10 districts with the highest Disparity Index in the polluting categories, we find the following:
Hyderabad and Ranga Reddy top in DI in Red industries, with enormous difference in their Pollution Intensity and Exposure rates compared with the next ranking district (329.3 to 51.2, and 314385 to 18800 respectively). This shows the colossal pollution burden being borne by Hyderabad and Ranga Reddy regions, and the concentration of industrial pollution in these two regions of AP.
Growth of Polluting Units
From the above analysis, it is clear that there is great urgency to take care of the environmental problems in the regions which have high DI, PI and ER.
One method to reduce these levels is to encourage the growth of Green and reduce that of Orange and Red industries.
However, data shows (Table 6) that from 2006 to 2007, the growth rate of the least polluting category (Green) was negative almost -10%, whilst that of Red and Orange were 17% and
This reduction in Green units is due to fall in the number of operating Green units in 2007, along with a rise in the numbers closed. Red and Orange on the other hand, have shown a rise in the number of operating units, as well as in the other categories.
From Table 7, it can be seen that Green operating units have shown a negative growth rate of 14.5%, while that of Red and Orange have increased by 9.2% and 11% respectively. The growth of number of Green units closed for non-compliance is also high (46%), as is the growth of Green sick units (66%). All these are driving down the least polluting industries in the State, while favouring the most polluting ones.
As there is no decreasing trend in the most polluting units in the State, we can tentatively infer that the efforts of the PCB to restrict them are at variance with that of the other Government departments of the State, which want to encourage industrial development regardless of the environmental impacts.
Growth Rates Across Districts:
According to ban orders issued by the APPCB, the Government has banned the establishment and expansion of different types of polluting industries in the four districts of Medak, Rangareddy, Mahaboobnagar and Nalgonda, since 1996. In 1998, this ban was made permanent (G.O.M. 62).
Let us now see if the ban orders are under implementation in these four highly polluted districts identified by the State Government, and if there is a fall in the number of industrial units belonging to the most polluting category — Red and Orange.
From Table 8, it can be seen that except for Orange units in Nalgonda, which have shown a negative growth, in all the other districts both Red and Orange units show a positive growth over the year 2006 to 07. Even in Nalgonda, there is positive growth of Red units in this year.
We thus find that the ban does not seem to have taken effect, for the number of industrial units in the various polluting categories continues to expand in these districts.
In this paper we have attempted to gauge the disparity in the pattern of location of polluting industries, the exposure to pollution and pollution intensity of various regions and districts of AP. We find that on all counts, the Hyderabad and Ranga Reddy regions lead in the ranking of Disparity Index, Pollution Intensity Index and Exposure Index. The highest positions are taken by Hyderabad-Ranga Reddy, Srikakulam- Vishakhapatnam, Other Telengana including Medak, and East and West Coastal Areas of AP.
Environmental regulation should concentrate on reducing pollution in these regions, as well as reduce or prevent further growth of polluting industries in these areas. At present, regional plans that include environmental components and provide for industrial zones compatible to the surrounding land uses do not exist in India. Environmental planning in industrial hotspots, will help in reducing pollution impacts from industries. However, this tool has seldom been used in this country. Proper siting of newly planned industries and industrial estates is a strong pollution preventive instrument that will ensure environmental soundness of industrial development.
Without proper environmental planning, agglomerative factors and industrial zones created by the AP Govt. have resulted in increase of such concentration. A strange outcome of such agglomeration is that of growth of Red and Orange industries, while there has been a negative growth of Green industries. Surprisingly, even in almost all those districts where there is a ban on Red and Orange units we find a positive growth of these industries. In this context greater government control on the concentration of polluting industries, and encouragement for the growth of green industries becomes imperative.
1 Kathedan, Kukatpalli, Patancheru-Bollaram, Vijaywada and Vishakhapatnam
2 Of course, the type of topography is also important in the spread of pollutants in a region.
3 We take only the anthropogenic impacts — though we are aware that there will be various other forms of ecological impacts in the region.
References and Additional Thinking
• A.P. Pollution Control Board website: www.appcb.ap.nic.in
• Central Pollution Control Board website: www.cpcb.nic.in
• CSO website: mospi.nic.in/cso
• Greenpeace website: www.greenpeace.org
• CPCB Annual Report, 2004-05, 2006-07: www.cpcb.nic.in
• Doing Business with Andhra Pradesh, www.apind.gov.in
• Belarus: addressing Imbalances in the Economy and society: National human Development Report, Appendix 3: 2004 – 2005
• G.O.Ms.No.62 (1999) Environment, Forests, Science & Technology (Env) Department, 20th April.
• Panth, Prabha : Regional concentration of polluting industries: a study of Andhra Pradesh, Indian Economic Journal, September issue.
(Dr. Panth is a professor at Osmania University, Hyderabad. Her area of speacialisation is Environmental Economics and have published about 22 articles in various academic journals and presented them at different seminars. She have also completed a UGC major research project entitled: "The Economic Significance of Wastewater Management: A case study of Bolaram Industrial Estate." This article is based on one of the chapters .
Dr. Shastri is a Director, Research Centre for International Business, CVR College of Engineering, Faculty, Department of Economics, Osmania University. He has also published twenty research papers in diverse areas. His Doctoral Dissertation (awarded in 1989 by Osmania University) was on “The Contribution of Michal Kalecki to Economic Theory: Focus on Income Distribution”. He secured distinction in M.A. (Osmania University), standing first in the Faculty of Social Sciences in M.A., and was the recipient of the Nawab Ali Yawar Jung Gold Medal and the McKenzee Book Prize.
The views expressed in the write-up are personal and do not re?ect the official policy or position of the organization.)