Building natural wealth

Environmental accounts can inform policy decisions

The Ministry of Statistics and Programme Implementation’s (Mospi’s) new “Strategy for Environmental Economic Accounts in India 2026-30” is an attempt to measure the country’s natural resources and ecosystem services in a more systematic accounting framework. The rationale is straightforward. Natural resources form the backbone of economic activities, but their depletion and the services provided by ecosystems are not adequately reflected in conventional measures such as gross domestic product (GDP). The timing is important. As India pursues faster growth amid increasing pressure on land and water, policymakers need to know not only how much the economy produces, but also what it is consuming from its natural-resource base. The strategy follows the United Nations System of Environmental-Economic Accounting (SEEA) and builds on Mospi’s work since 2018. The pollination account can illustrate why this matters. Mospi estimates the value of pollination services at ₹2.66 trillion in 2021-22, up from ₹1.15 trillion in 2012-13, equivalent to roughly 8-10 per cent of crop output. Conventional agricultural accounts capture the value of the crop, but not the ecosystem service that contributes to producing it. Making such a contribution visible can strengthen the economic case for protecting pollinators, supporting beekeeping and designing pollinator-friendly agricultural policies. The same logic applies to water accounts, which can help policymakers assess resource use and groundwater stress, and also to mineral accounts, which can track extraction, depletion and discoveries.

 The strategy also has a wider development role. Mospi estimates that environmental accounts can support the assessment of about 40 global indicators across nine Sustainable Development Goals. The new road map expands the coverage to carbon stocks, biodiversity and environment-related economic activities, potentially making environmental information more useful for decisions extending well beyond the environment ministry. International experience shows what such accounting can achieve. The United Kingdom (UK) natural-capital accounts estimated the annual value of ecosystem services at £41 billion in 2023, while the asset value of natural capital was estimated at £1.6 trillion. Such estimates bring nature into discussions of national wealth rather than treating it only as an environmental concern.

 But measurement is only the first hurdle. Implementation is the harder test. India has undertaken environmental-accounting studies at state level for years, but differences in concepts, definitions, and methods have prevented these efforts from being aggregated into a consistent national picture. Only 18 states and Union Territories have so far constituted inter-departmental groups on environmental accounting, while Mospi itself identifies a shortage of expertise in the SEEA framework. The next five years should, therefore, focus less on adding accounts for their own sake and more on making them comparable, timely and usable. Common definitions, interoperable state databases, spatially consistent data, and trained officials are necessary. Most importantly, the accounts must enter the decision-making process — from groundwater allocation and mining permits to land-use planning and forest restoration. The real success of the 2026-30 strategy will not be the number of accounts published but whether the depletion of natural wealth can be arrested for sustainable development.