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8. Overlapping fiscal domains and the effectiveness of environmental policy in India Subrata Mandal and M. Govinda Rao 1. INTRODUCTION An important precondition for the satisfactory provision of public services is the assignment of fiscal domains to, and their implementation by, different levels of government. A clear and inextinguishable assignment system confers ownership rights and this provides incentives for making the necessary investments, and ensures efficiency and accountability in the provision of public services. Fiscal assignments, however well construed and designed, do involve overlapping, as the geographical boundaries may not coincide with the benefits of various public services. In part, an overlapping fiscal system is the result of vertical and horizontal competition, and the competition in turn can accentuate overlapping (Breton, 1995). Satisfactory resolution of this is an important challenge in all multilevel fiscal systems. The issue is particularly relevant in the context of environmental protection, because even the issues with local environmental jurisdictions and applications have global implications. This chapter analyses the assignment of environmental functions in Indian federalism. More specifically, it examines the assignment system and implementation aspects pertaining to three major components of environment, namely, water, air and forests. The assignment of environmental functions and its overlapping is analysed in terms not only of the different levels of government, but also between the executive and judiciary. Specifically, the chapter examines judicial intervention in environmental protection in India and argues that activism is not a solution or a substitute for the...