A group of students at the prestigious Indian Institute of Technology (IIT), Chennai, got together a few years ago and decided to turn entrepreneurs. They had managed to extract good quality biofuel from seaweeds that grow abundantly along the long stretches of Chennai's sea shores. With great enthusiasm they formed a company, found a mentor and initial financial support to make their dreams a reality.
After a few years, their dream run has hit a major hurdle. It is a law, enacted with great fanfare by the National Democratic Alliance (NDA) government led by Prime Minister Atal Behari Vajpayee in 2002, called the Biodiversity Act, 2002.
The Vajpayee government enacted this omnibus legislation in good faith to protect India's rich biodiversity. It was also an international obligation for India as a signatory to the Convention on biological Diversity (CBD). CBD itself was the result of the high profile Earth Summit in June 1992 held at Rio de Janeiro, Brazil, as the world's first global meet to save the environment.
Now what is the problem with the Biodiversity Act? The framers of the Biodiversity Act have put many stringent provisions in their overzealous attempt to protect everything that lives and grows in India.
Let us take the first major hurdle. The seaweed entrepreneurs cannot access venture capital from most of India's leading financial institutions except the government-owned banks. Because, almost all the Bluechip financial institutions have substantial foreign share and investment holding. The Biodiversity Act prohibits foreigners and foreign companies from having any say in the running of companies that deal with biological resources for commercial exploitation.