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International Journal of Financial Management and Economics
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E-ISSN: 2617-9229|P-ISSN: 2617-9210
International Journal of Financial Management and Economics
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Vol. 8, Issue 2 (2025)

Assessing the relationship between economic development and environmental degradation: EKC analysis of EAG states


Karuna Shanker Kanaujiya, Sonakshi Singh and Sarvesh

Environmental degradation has become a major obstacle to sustainable development, especially in the Empowered Action Group (EAG) states of India, which are distinguished by rapid population expansion, economic underdevelopment, and inadequate infrastructure for environmental management. Under the context of the Environmental Kuznets Curve (EKC) theory, this study experimentally investigates the connection between environmental deterioration and economic growth in EAG states. The study compares economic development as defined by Per Capita Net State Domestic Product with important environmental variables, including SO2 emissions, deforestation rates, and air quality levels, using state-wise panel data from 2010 to 2023.The study tests whether the connection follows an inverted U-shape, as suggested by the EKC hypothesis, using econometric modeling approaches such as panel regression and fixed/random effects models. The results are intended to determine if increasing economic growth first makes environmental degradation worse before improving after a particular income threshold. The significance of sustainable development plans that are adapted to the particular socioeconomic circumstances of EAG nations. To maintain a balance between ecological preservation and economic advancement, policy solutions center on encouraging green growth, making investments in clean technology and bolstering environmental governance. This study adds to the body of knowledge on environmental sustainability and regional inequalities by providing policymakers with a road map for achieving long-term economic and environmental objectives.
Pages : 1245-1253 | 216 Views | 124 Downloads


International Journal of Financial Management and Economics
How to cite this article:
Karuna Shanker Kanaujiya, Sonakshi Singh, Sarvesh. Assessing the relationship between economic development and environmental degradation: EKC analysis of EAG states. Int J Finance Manage Econ 2025;8(2):1245-1253. DOI: 10.33545/26179210.2025.v8.i2.681
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