constructs the environmental quality index for the 14 major Indian
States and Iookfor its possible relationship with economic growth. This
paper also attempts to capture the relationship between environmental
sustainability and human well-being - as measured by the Human
Development Index. To capture the temporal aspects Ofenvironmental
quality and to understand the dynamics of economic liberalization
process, the entire period of our study has been divided into two broad
time periods - Period A (1990-1996) and Period B (1997-2004).

It is observed that different States possess different strengths
and weaknesses in managing various aspects of EQ. For instance, while
Maharashtra is in the second position in terms of EQI during period B,
and fares satisfactorily in terms of INDOOR, and NPSP; it's performance
on ENERGY and FOREST is not that satisfactory. On the other hand,
Punjab, the state at the bottom in terms of overall EQI and ENERGY
and WATER, is actually topper for INDOOR. It also shows that there are
scopes for the States to learn from each other about different aspects
Ofenvironmental management. Therefore, adoption of a `one-size-fits-
all' National Environmental Policy at the country-level might have limited
impact on the local environmental quality. In other words, individual
States should adopt environmental management practices based on
their local (at the most disaggregated level) environmental information.
Furthermore, over time performance of an individual State varies across
the environmental criteria, which Showsthatenvironmental management
practices should take into account this dynamic nature of environment,
and review their environmental status or achievement regularly.

44

The analysis on the relationship between economic growth and EQ
does not reveal a very clear picture during the two time periods under
consideration. For different States, the impacts of economic restructuring
process, as adopted by them during 1990s, have affected the
environmental quality differently. It is observed that while States like
Maharashtra has performed well on both counts, growth in northern
States like Punjab and Haryana has taken place mostly at the cost of
EQ. On the other hand Orissa, despite being a low-income State,
performed well during both period A and B in terms of EQ. The results
indicate that laggards like Bihar and MP have also achieved their
economic growth at the cost of their EQ. On the other hand a few
States like Karnataka and Rajasthan have achieved economic growth
and also maintained their environment well. The obtained results again
indicate that individual States should adopt special environmental
measures, based on their environmental impacts assessment of major
economic activities, to achieve sustainable economic growth.

The formal testing for the existence of Environmental Kuznets
Curve (EKC) through multivariate OLS regression models are estimated
by assuming non-linearity in the relationship between PCNSDP and the
composite score of the defined environmental sub-categories. It is
observed that while for a few categories an inverted U-shaped
relationship exists between PCNSDP and individual indicator of
environmental quality (e.g. - GHGS, LAND, ENERGY, NPS),²⁴ a linear

²⁴ However it goes against the popular EKC hypothesis, which shows inverted
U-shaped relationship between PCI and environmental degradation (pollution) instead
of environmental quality.

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