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CA Foundation · Business Laws · Indian Regulatory Framework

Rajesh, a manufacturer of electrical appliances, wants to establish a new factory unit in Maharashtra. He learns that his business activity falls under the list of industries that require prior environmental clearance before commencement. Which of the following best describes the regulatory framework that would apply to Rajesh's situation?

Prior environmental clearance from the competent authority is mandatory before commencement of certain categorized industries. This is a pre-commencement requirement under India's environmental regulatory framework, not optional or post-commencement. Rajesh must obtain this clearance before construction or operations begin.

  1. ARajesh must obtain a certificate of registration from the District Collector before any construction begins
  2. BRajesh must obtain prior environmental clearance from the competent authority as specified under environmental laws, and this is a mandatory pre-commencement requirementCorrect
  3. CRajesh can commence operations immediately and apply for environmental clearance within six months of starting production
  4. DRajesh must obtain clearance only from the municipal corporation where the factory is located

Explanation

Under India's environmental regulatory framework, certain categories of industries require prior environmental impact assessment and clearance before the project commences. This is a mandatory pre-commencement requirement, not a post-commencement formality. The first option confuses industrial licensing with environmental requirements. The third option incorrectly treats it as a post-commencement process, which defeats the purpose of environmental safeguards. The fourth option ignores that environmental clearance comes from the Ministry of Environment or state authority, not just the municipality.

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