[Editorial] The Newly Proposed Star Rating System

5-star rating system

What the editorial is about?

The recently proposed Star Rating System and the associated concerns.


The Ministry of Environment, Forest, and Climate Change (MOEFCC) recently has announced the implementation of a new system of rating each State Environment Impact Assessment Authority (SEIAA).

Most probable and repeated topics of upsc prelims

What is this Star Rating System?

  • The Environment Ministry is to rank and incentivize the states with this new system.
  • The ministry will find out states that provide environmental clearances efficiently in a short duration of time.
  • It will then incentivize such states. For this, the star rating system provides marks to the states on a scale of seven.
  • The states receive two marks for clearing a project in less than 80 days, one mark for clearing in 105 days and zero for clearing more than this duration.
  • If the state has less than 10% of projects for scrutiny, then one mark is provided and so on.

What are the features of the Star Rating System?

Conditions for SEIAA

  • Basically, it introduces conditions for State Environment Impact Assessment Authorities (SEIAA) which includes
    • Percentage of disposal of fresh terms of reference
    • Environmental Clearances waiting for more than 105 days
    • Terms of Reference proposals waiting for more than thirty days
    • Proposals waiting for more than thirty days
    • Complaints reassessed

Basis of Rating

  • The system will provide a star rating to the SEIAA. The rating is provided based on the performance of the authority in the past six months.
  • The ratings are updated at the month-end.

Average Time Taken to Grant the Clearance

  • The average time taken to grant the clearance has been decreased to 75 days.
  • Earlier it was 105 days in accordance with the Environmental Impact Assessment Notification, 2006.

Benefits of the Star Rating System

  • Incentivize state through a Star Rating System
  • Encourage transparency, efficiency and accountability.

Environmental Clearance Process and Division of Power

  • The environmental clearance process is warranted for 39 types of projects listed in the Environmental Impact Assessment notification of 2006. These include the mining of minerals, the building of airports and townships, and the installation of thermal power plants, to name a few.
  • These projects are categorized based on the kind of environmental clearance they would require.
  • Category A projects require mandatory environmental clearance at the central level, and category B projects are reviewed at the state level by the SEIAAs.


The Proposed New System

  • The Ministry of Environment, Forest, and Climate Change (MOEFCC) announced the implementation of a new system of rating each State Environment Impact Assessment Authority (SEIAA).
  • The process is based on the speed with which they grant environmental clearance (EC) to projects such as mining operations and construction work.
  • Under this scheme, State-level environment committees that appraise industrial projects on their potential environmental risk would be incentivised with points for “transparency, efficiency and accountability”.

Concerns Associated with the New System

Artificial Competition

  • It creates artificial competition between states, which may result in industries locating in states that offer environmental clearance quicker.

Violation of Various Laws/Pressure of Speed

  • The proposed system is contrary to the Environment (Protection) Act,1986. i.e., the aim and the focus of the new system is on clearing the project in a short duration of time.
  • It also violates article 21 and is an arbitrary exercise of power.

Role of Specialists

  • Decision-making seems to be completely left to bureaucrats rather than to environmental specialists.

Number of Independent Experts

  • State committees are hampered by having very few independent experts.

Way Forward

  • Considering the genuine concerns against the proposed Star Rating System, there is a need to increase trust in the system and ensure that all States have competent experts thereby making the newly proposed system a pro-business venture.
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x