The Ministry of Statistics and Programme Implementation (MoSPI) has officially launched its comprehensive framework to assign monetary value to India's coal reserves, marking a significant step toward natural capital accounting in the country. As reported by the Press Information Bureau, this initiative comes alongside ₹211.71 crore worth of road works approved for Tripura under PMGSY-IV, demonstrating the ministry's broader infrastructure development focus. The ministry has also announced the launch of India's first-ever Index of Services Production (ISP), which will track the services sector's growth starting July 14, 2026. The ISP, with 2024-25 as the base year, will be released monthly with a 60-day lag, beginning with April 2026 data. This new index aims to provide high-frequency insights into the dominant services sector's performance, complementing existing economic data and serving as the services-sector equivalent of the Index of Industrial Production.
The ministry has recommended the OECD (2025) methodology as the most suitable framework for India, while proposing discount rates of 6 per cent, 8 per cent and 10 per cent for analysis, as reported by Business Standard. This approach is designed to 'balance India's near-term coal energy requirements and the imperative of sustainable resource use' and highlights the need for better disaggregated data in official statistics to facilitate appropriate resource valuation. The paper concludes that the OECD framework is most suitable because it aligns closely with the SEEA framework, relies on national accounts data already available in India, and incorporates techniques such as price smoothing and sensitivity analysis that can improve valuation consistency. The ministry recommends testing multiple discount rates and incorporating factors such as sterilisation losses to avoid overstating the value or lifespan of reserves.
According to the ministry data reported by Business Standard, India's in-situ geological resources of raw coal stood at 400,715.45 million tonnes as of March 31, 2025, while total lignite resources were 47,370.54 million tonnes as of April 1, 2025. Production figures for 2024-25 showed 1,047.523 million tonnes for raw coal and 45.133 million tonnes for lignite, with pithead closing stocks of 130.887 million tonnes and 2.58 million tonnes, respectively. The ministry combines raw coal and lignite into a single 'coal' asset because national accounts data do not separately disaggregate lignite. The proposed framework focuses on proved coal reserves classified under the United Nations Framework Classification (UNFC), where geological confidence and extractability are relatively well established. To estimate the economic value of underground coal reserves, the paper recommends using the Net Present Value (NPV) approach, calculating the future resource rent expected from extraction and discounting it to present-day values, along with the Residual Value Method which isolates the contribution of the natural resource itself by deducting production costs and normal returns from total revenues.
Rajib Maitra, partner and sector leader at Deloitte South Asia, told Business Standard that assigning monetary value to coal reserves is a useful exercise as it treats coal as an economic asset rather than merely a physical stock. He explained that the objective is to better understand the true economic cost of extraction, including resource depletion over time, which can help estimate the long-term wealth of the nation and potential future revenue streams from mining operations. Maitra noted that the discussion paper signals a potential shift in natural capital management in India, with monetary valuation potentially influencing long-term policy decisions and sustainability reporting. The paper forms part of a broader effort to implement the System of Environmental-Economic Accounting (SEEA), an internationally recognised framework that complements conventional national accounts by tracking natural resources as economic assets, helping governments assess long-term sustainability alongside economic growth.
As reported by Business Standard, Maitra cautioned that valuing coal reserves poses several challenges including overestimation of economically extractable resources, variations in coal quality and ash content across seams, differing extraction costs across mines, logistical constraints, uncertainty around future thermal coal demand amid renewable energy expansion, and difficulties in monetising environmental and social costs. He added that if 'depletion costs' are formally computed and published, they may affect future revisions of mining royalties, environmental levies or resource taxes. The ministry emphasized that this initiative would place India at the forefront of natural capital accounting among emerging economies, ensuring resource decisions are made with full awareness of their consequences for national wealth and future generations. The framework would enable policymakers to assess not only annual production but also changes in the stock of natural capital available to future generations, supporting evidence-based policymaking on energy security, mining, royalties and resource management.
