Green accounting of exhaustible mineral resources in India: a case-study of bauxite sector
Student name: Ms Shobhna Jha
Guide: Dr Sukanya Das
Year of completion: 2016
Host Organisation: Institute of Economic Growth, New Delhi
Supervisor (Host Organisation): Dr M.N. Murty
Abstract: In India, little effort has been made towards estimating economic depletion of the exhaustible
mineral resources and effect of current unsustainable mineral extractions on the welfare of
future generations. Given, that natural assetsâ€™ base is rapidly declining across the world and
especially in India with its high natural resourcesâ€™ dependability and huge population
pressure; fact that there is no account of natural capital loss in the economyâ€™s balance sheet or
in the GDP figures is truly grave to be ignored. In this direction, green accounting is found
addressing the concerns of ensuring sustainable use of the non-renewable mineral resources.
This thesis tries to explore the dynamics of Green Accounting - its need, feasibility, policy
implications; extrapolating it with Inclusive Wealth, Genuine Savings concepts for gaining a
broader macroeconomic perspective. A case study analysis of â€˜Bauxiteâ€™ mineral resource and
its green accounting has been undertaken in this regard. Applying the user-cost methodology,
green accounts for Bauxite have been calculated at three levels- for all India; for major Indian
states producing Bauxite and for three principal bauxite mining companies in India.
Results primarily suggest two main conclusions- firstly, there is unanimously, a huge gap
between the â€œactualâ€ and the â€˜trueâ€™ or â€œsustainableâ€ rate of extraction of bauxite-whether at
all India, statesâ€™ or mining companyâ€™s level. Secondly, the broader stock measures of well
being, like- Genuine Savings as calculated at All Indiaâ€™s level, reiterate the implication of a
grave need of policy discourse on comprehensive macroeconomic parameters, i.e. moving
beyond just using GDP.
Broadly, the idea throughout this thesis is to justifiably inform the â€˜policy-makersâ€™ about the
need to move from flow to stock accounting, in measuring economic growth and thus,
development. Results will also serve as a significant value addition to the field of green
accounting and valuation studies for exhaustible mineralsâ€™ sector as bauxite has not been
analyzed in this manner till now through mining companiesâ€™ perspective or even at all-India
Key Words: GDP, Green Accounting, Mineral depletion, mineral reserves, inter-generational
equity, Sustainable Development, Genuine Savings, Inclusive Wealth.