An empirical analysis of the environmental Kuznets curve for water pollution in India

The Environmental Kuznets Curve (EKC) has become an accepted standard for describing the relationship between economic growth and environmental degradation. However, the available evidence based on the EKC for water is ambiguous and it varies depending on the sets of countries selected for the study. This leaves an open question whether there is an EKC type of relationship for water. This paper contributes to this debate by using per capita income and water quality indicators for 16 states of India along with a variety of relevant explanatory variables. Using a panel data set for 20 years (1981-2001) we apply both the Generalised Least Square (GLS) and Arellano-Bond Generalised Method of Moments (GMM A-B) econometric methods. We did not find evidence in support of the EKC hypothesis. Overall, we found that the decline in pollution during the process of economic growth is only temporary, as it tends to rise with further income growth. Population density, livestock population and literacy are found to have strong effects on the water quality of the rivers of India.