The article critically analyzes the need of growth and the interface between economic development and environmental degradation. The article also analyzes whether the underdeveloped countries can allow environmental degradation to continue till they attain higher income levels.

The relationship between economic growth and environment issues is very complex and depends on a host of factors. With increasing emphasis on economic growth, environmentalists are also raising their voice to protect the environment. The article tries to analyze the pros and cons of economic growth that leads to environmental degradation. It is hypothesized that the relationship between economic growth and environmental quality follows "Environmental Kuznets Curve" (EKC), showing inverted U-shaped pattern.

Economic growth may be defined as the increase in a country's productive capacity, which can be measured by comparing a country's Gross National Product (GNP) in a year with the GNP in the previous year. Increase in the capital stock, advances in the technology, and increase in the quality and level of literacy are considered to be the principal causes of economic growth. In recent years, the idea of `sustainable development' has brought in additional factors, such as environmentally sound processes, that must be taken into account when examining the issue of economic growth.

With an increasing urge of people for faster growth, there has been a tremendous increase in economic activity. This automatically leads to pollution and environmental degradation. The environment gets degraded by factors, like water and air pollution, solid and hazardous wastes, deforestation, atmospheric changes, etc.

The environmental problem refers to the problem of depletion of natural resources. It occurs when resources are exploited at a rate faster than that needed for their replenishment by natural processes.

MBA Review Magazine, Economic Development, Environmental Degradation, Environmental Kuznets Curve, EKC, Gross National Product, GNP, Capital Stock, Water and Air Pollution, Solid and Hazardous Wastes, Deforestation, Atmospheric Changes, Technology Effects, Polluting Industrial Economies, Anti-pollution Technologies, Floods and Droughts, Intergovernmental Panel on Climatic Change, IPCC, Industrial Revolution, Solar, Wind and Hydropower.