Leading article: Corporate power faced down

Two decades ago, the Indian state made a shamefully one-sided deal with Union Carbide over the 1984 Bhopal disaster, which killed 3,800 people and blighted the lives of thousands more. The Supreme Court, supported by the Delhi government, cleared the American firm of legal liability in return for a minimal payout to victims.

Yet that supine attitude from the Indian state towards corporate power now feels like a distant memory. Yesterday, the Delhi government turned down the application of the Vedanta mining company to extract Bauxite from the Niyamgiri hills in the eastern state of Orissa. The government has also said that Vedanta might already be breaching environmental laws by processing bauxite extracted from elsewhere without permits.

These decisions reflect an increasing self-confidence from India in the face of powerful business interests. The activities of a South Korean steel firm and an Indian energy conglomerate are also under review. India's environment minister, Jairam Ramesh, says he wants to protect and expand the country's remaining forest land as part of the state's efforts to curtail climate change.

The Indian government also appears to have realised that allowing Vedanta to mine in Orissa would be detrimental to internal security. The hills in Vedanta's sights are sacred to two local tribal populations. As a government panel stated last week, India's long-running Marxist insurgency has been fuelled by the resentment of locals who have been displaced to make room for industrial developments.

We shall have to wait and see whether India's enlightened approach to development and its understanding of the need to balance economic growth with the protection of natural resources and local rights endures. The pressure to put short-term growth above the environment is likely to intensify as India industrialises. Similar pressures are in evidence in developing nations around the world from Brazil to Indonesia.

The fact that India is a democracy should strengthen politicians in the face of the developers. No such constraints are in place in China. But India is also plagued with official and political corruption. And the country's natural resources are concentrated in its impoverished east. It will require immense political will to hold the line. For now, though, Delhi should be congratulated for recognising the intrinsic value of its natural environment, the human rights of it tribes and the fact that some forms of economic growth are simply not worth having.