draghuram, unfortunately while os.putenv() can be fixed to be
symmetrical any putenv call from a C module cannot, for example:

If you make an extension:
#include <stdlib.h>
PyObject *putenvC(PyObject *module, PyObject *args)
{
    int result;

    if (!PyArg_ParseTuple(args, ""))
        return 0;

    result = putenv("FOO=BAR");

    return Py_BuildValue("i", result);
}

The following behaviour will occur:
$ python
>>> import putenv
>>> putenv.putenvC()
>>> assert(os.getenv('FOO') == None)
>>> assert(os.environ.get('FOO') == None)

This is because the os.environ dictionary will never be updated:
From Lib/os.py:
def getenv(key, default=None):
    """Get an environment variable, return None if it doesn't exist.
    The optional second argument can specify an alternate default."""
    return environ.get(key, default)