BALANCING ECONOMIC GROWTH AND ENVIRONMENTAL SUSTAINABILITY: THE IMPACT OF PIGOUVIAN TAXES ON DELHI-NCR’S INDUSTRIAL SECTOR

Abstract

This study examines the role of Pigouvian taxes as a policy instrument to address industrial pollution in the context of economic growth within the Delhi-NCR region. Industrialization has contributed substantially to economic development but has concurrently resulted in significant environmental degradation, particularly in urban centers. Pigouvian taxes, which aim to internalize the external costs of pollution, present a potential solution for mitigating the environmental impacts of industrial activities while promoting sustainable economic growth. Through empirical analysis and policy evaluation, this research assesses the effectiveness of Pigouvian taxation in curbing industrial pollution, facilitating technological advancements, and managing the economic implications for industries in Delhi-NCR. The findings suggest that while higher taxes incentivize the adoption of cleaner technologies, small-scale industries encounter financial difficulties in meeting compliance standards. The study recommends a phased approach to tax implementation, accompanied by green subsidies and robust regulatory enforcement, to enhance the overall effectiveness of the policy. By aligning environmental responsibility with economic growth, Pigouvian taxes can contribute to a more sustainable industrial ecosystem. Key policy recommendations include improved monitoring systems, increased support for green innovations, and incentives to encourage cleaner production practices.