Abstract/Summary

Our article considers the Environment Impact Assessment (EIA) for certain sectors in India and examines the implications of decentralization. We find that the decentralization of EIA processes has improved environmental regulation and been successful in reducing polluting activities in India. Our evidence suggests that decentralization was associated with relatively fewer firm births in states with stricter environmental enforcement. Key among our recommendations is that the development of stronger collaborations between EIA, SEIAA and State Pollution Control Board would enhance enforcement of environmental regulation and reduce disparities between states, through knowledge-and-resource sharing and improving technical, financial and administrative capabilities across states.