Measuring genuine investment: A concept paper for India

In the Indian context, studies on resource accounting have been attempted by various scholars. Theoretical developments in methods for valuing discovery, depletion and growth of natural resources in the context of the system of national accounts are well developed. The valuation of environmental degradation still remains underdeveloped, with theoretical approaches suggesting that the marginal social costs of pollution are the correct way of valuing degradation while at a more empirical level, the tendency has been to focus more on maintenance cost sort of approaches. In particular, attention has been paid towards valuing the flows of goods and services from forests in India. With regard to non-forest resources, individual researchers have also undertaken primary survey based studies to estimate costs of resource depletion and costs of deteriorating air and water quality However, the challenge remains in empirically establishing the relationship between the weak sustainability indicator and the performance of the Indian economy.