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Foreign Aid and Its Environmental Implication in India

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  • Kalpana Sahoo
  • Narayan Sethi

Abstract

The present study empirically investigates the impact of foreign aid on environmental quality in India with the presence of some linkage factors i.e. gross domestic product, trade liberalization, net forest depletion and total value added by the industrial sector. This study is based on the annual time series data covering the period from 1970-71 to 2010-11. By using the OLS technique, the study finds that impact of foreign aid on environment degradation is negative and statistically significant. However, aid helps in reduction of environment pollution in India. It concludes that deforestation, industrialization and economic growth are the major factors which responsible for environment degradation in India. This study suggests that, it is the responsibility of the government to make appropriate plans and programs to maintain a balance between growth challenges and environment challenges. Careful planning and systematic policies should be implemented to ensure that the green growth strategies do not result in a slow growth strategy.

Suggested Citation

  • Kalpana Sahoo & Narayan Sethi, 2014. "Foreign Aid and Its Environmental Implication in India," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(53), pages 121-140, September.
    • Handle: RePEc:rej:journl:v:17:y:2014:i:53:p:121-140
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    References listed on IDEAS

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    Cited by:

    1. Qingqian He & Qing Meng & William Flatley & Yaqian He, 2022. "Examining the Effects of Agricultural Aid on Forests in Sub-Saharan Africa: A Causal Analysis Based on Remotely Sensed Data of Sierra Leone," Land, MDPI, vol. 11(5), pages 1-20, April.

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    More about this item

    Keywords

    Foreign aid; Environmental Quality; Ordinary Least Square; India;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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