‘High time for MSMEs causing pollution to comply with environmental norms before govt shut them’

Published: December 4, 2019 12:03 PM

The formation of industrial clusters has helped the MSMEs get organised. However, the key to the success of these MSMEs located in industrial clusters is in ensuring that they comply with the applicable environmental norms.

National Pollution Prevention Day, industrial disaster, how many died in bhopal gas tragedy, bhopal gas tragedyCPCB found that the number of identified polluted industrial clusters had gone up to 100. (Image: Reuters)
  • By Nawneet Vibhaw

In 2015 when the Delhi Government had exempted the micro, small and medium enterprises (MSMEs) from seeking environmental clearances and consents, it had resulted in both applaud and criticism alike. It was appreciated as many thought that this would make it easier for the MSMEs to conduct business but many were upset as it would have had a negative impact on the environment. While MSMEs have played a crucial role in the growth of the country, for quite some time they were fairly disorganised. The formation of industrial clusters has helped the MSMEs get organised and also conduct business in a more competitive manner. However, the key to the success of these MSMEs located in industrial clusters is in ensuring that they comply with the applicable environmental norms.


The National Green Tribunal (NGT) in its order dated November 14, 2019 (corrected on November 19, 2019) has directed the state pollution control boards (SPCB) and the pollution control committees (PCC) to initiate strict action against the polluting industrial clusters across the country. In case appropriate action is not taken the NGT will have no option but to proceed against the Chairmen and Member Secretaries of the SPCBs and PCCs. Consequently, this may result in their replacement or stoppage of their salaries till compliance of the NGT’s orders is ensured. The NGT has also mentioned that punitive compensation may be recovered from the SPCBs and PCCs. This clearly is the death knell for the non-compliant MSMEs and industrial clusters where they are located.

The hon’ble NGT has passed this order in furtherance of its earlier orders dated December 13, 2018, and July 10, 2019, dealing with Comprehensive Environmental Pollution Index (CEPI) and remedial action for control of pollution in identified polluted industrial clusters. CEPI is calculated based on the nature of pollutants, ambient pollutant concentrations, receptors (number of people affected) and additional high-risk element, as prepared by the Central Pollution Control Board (CPCB).

Based on the joint study conducted by CPCB and SPCBs in 2009-2010, 88 industrial clusters were notified as Polluted Industrial Areas (PIA) and were ranked as critically polluted area (CPA), severely polluted area (SPA) and other polluted areas (OPA) based on their CEPI score. In 2016 CPCB revised the formula for CEPI score evaluation based on continuous environmental quality monitoring in all CPAs and SPAs, installation of Continuous Ambient Air Quality Monitoring Stations (CAAQMS) and Continuous Water Quality Monitoring Stations (CWQMS). It is worthwhile to note that many of these identified industrial clusters have a substantial number of MSMEs.

Also read: Microsoft’s rival Indian cloud startup achieves this major milestone serving Fortune 500 companies

CPCB carried out another assessment in 2017-2018 based on the 2016 criteria and revised formula and found that the number of identified polluted industrial clusters had gone up to 100 with 38 critically polluted, 31 severely polluted, and 31 other polluted clusters. It is worthwhile to note that NGT in its order dated December 13, 2018, had directed all SPCBs and PCCs to submit a plan within three months to bring all polluted industrial clusters within the safe parameters as mandated under the Indian pollution control laws. It had also ordered that any violation of the pollution control laws would amount to a criminal offence and therefore would be dealt with by issuance of orders requiring measures to be undertaken to stop the polluting activity, prosecution and compensation for restoration of the environment.

NGT Direction

The NGT had clearly mentioned in its order dated July 10, 2019, as well that asking the authorities to prepare an action plan does not obviate the requirement for enforcement of the law. The MSMEs have to also realize that if they wish to continue their operations profitably, they have no option but to be compliant with all the applicable laws especially the environmental laws. The NGT had ordered earlier as well that the violators and polluters should be punished, measures would have to be taken for the polluting activities to be stopped and compensation for the damage already caused would have to be recovered along with the cost of restoration as per the law. The NGT has in the past passed orders related to pollution control in industries in Taloja industrial area in Maharashtra; Tronica city in Loni, Ghaziabad and Jajmau, Banthar and Unnao in Uttar Pradesh.

While this particular judgment of the Hon’ble NGT deals with the polluted industrial clusters and calls for strict action, the NGT has also held earlier in its order dated July 10, 2019 that ‘no further industrial activities or expansion be allowed with regard to the ‘red’ and ‘orange’ category units till the said areas are brought within the prescribed parameters or till the carrying capacity of the area is assessed and new units or expansion is found viable having regard to the carrying capacity of the area and environmental norms’. This means that the industries and enterprises which fall in the red or orange category and are located in these industrial clusters will have to be shut down if found to be non-compliant with the norms. This NGT judgment, therefore, will ensure that only such industries are allowed to operate, be it in the industrial clusters or elsewhere, which are in complete compliance with the applicable environmental regulations. The MSMEs, therefore, have no option but to comply with the environmental norms and carry their business with the relevant environmental clearances and consents.

(Nawneet Vibhaw is the Partner at Khaitan & Co. Views expressed are the author’s own.)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Atmanirbhar MSMEs: How Modi govt’s Make in India 2.0 is gateway to self-reliance for small businesses
2Covid 19: Big opportunity or doomsday scenario for MSMEs? Stage set for firms to decide their future
3Rationalisation, decriminalisation, digitsation: The three-pronged view to reduce MSME compliance burden