New Delhi (ABC Live): The Ministry of Statistics and Programme Implementation has taken an important step towards measuring India’s coal reserves as an economic asset rather than reporting them only in physical tonnes. Its discussion paper examines how India can compile monetary asset accounts for coal under the United Nations System of Environmental-Economic Accounting Central Framework.
The paper compares three approaches. These include the Organisation for Economic Co-operation and Development methodology, the World Bank’s Changing Wealth of Nations framework and the approach used in the Philippines. Although all three use the Net Present Value–Residual Value Method, they differ in their treatment of prices, resource rents, produced capital, extraction profiles and discount rates.
After comparing the alternatives, the paper prefers the OECD framework for India. It considers this approach more compatible with India’s National Accounts Statistics, more transparent in its treatment of prices and more practical under current data limits.
However, the document does not calculate an actual monetary value for India’s coal reserves. Instead, it builds a methodological route through which statisticians may calculate that value in the future.
Moreover, the proposed route depends on several strong assumptions. It combines raw coal and lignite, allocates mining-sector income and fixed capital to coal through proportional estimates, projects recent extraction into the future and applies fixed sterilisation-loss ratios.
Therefore, the paper should be treated as a credible experimental foundation rather than a completed coal asset account. Before MoSPI adopts the method as an official statistical standard, it should publish pilot calculations, alternative scenarios and complete sensitivity results.
ABC Live Key Findings
| Issue | ABC Live assessment |
|---|---|
| Core method | Technically credible starting point |
| Preferred model | OECD approach is practical for India |
| Actual valuation | Not calculated in the paper |
| Coal data | Excessively aggregated |
| Discount rates | Proposed rates may be too high |
| Extraction path | Constant path is unrealistic |
| Sterilisation | Major unresolved accounting issue |
| Climate risk | Largely absent |
| Social costs | Outside the valuation boundary |
| Readiness | Suitable for an experimental pilot |
Why This Discussion Paper Matters
India’s conventional national accounts record production, income, investment, consumption and fixed capital. However, they do not fully show how the extraction of non-renewable resources reduces the country’s underlying natural wealth.
As a result, coal extraction may increase current gross value added while simultaneously reducing the stock of natural capital available to future generations. Monetary asset accounting attempts to reveal this hidden balance-sheet effect.
This distinction has direct policy importance. If the country extracts coal worth ?100 but fails to replace the depleted natural capital through infrastructure, human capital, technology or ecological restoration, national income may rise even while national wealth declines.
Moreover, coal continues to occupy a central place in India’s power and industrial systems. ABC Live’s earlier report on India’s Energy Reality 2026 found that coal still provides India with a major domestic energy cushion, although renewable capacity continues to grow rapidly.
Therefore, India needs a credible way to measure both coal’s present economic role and the wealth lost through its extraction. Nevertheless, the monetary number must not be confused with the full social value of coal or the full cost of mining it.
What MoSPI Is Trying to Measure
The discussion paper seeks to estimate the market or market-equivalent value of commercially recoverable coal lying underground. Since in-situ coal deposits rarely trade in open markets, statisticians cannot directly observe a reliable market price.
Consequently, the paper proposes estimating the present value of the future income that the coal resource can generate. This income is described as the resource rent attributable to the natural asset.
Resource rent is not the same as total coal revenue. Instead, it represents the surplus remaining after deducting operating expenses, employee costs, intermediate consumption, depreciation and a normal return on machinery, buildings and other produced assets.
Therefore, the proposed method attempts to isolate the economic return generated by the coal deposit itself. It then discounts the expected future stream of that return to arrive at an estimated present value for the underground resource.
How the Proposed Valuation Method Works
The preferred framework follows the Net Present Value–Residual Value Method. Although the equations appear complex, the underlying process can be divided into a few connected stages.
First, statisticians estimate the operating surplus generated by coal extraction. Next, they deduct the user cost of produced capital, including depreciation and the normal return on fixed assets.
Thereafter, they divide the estimated resource rent by annual extraction to obtain a unit resource rent. Because annual prices and profits may fluctuate, the method smooths the unit resource rent across several years.
Finally, the model projects future extraction and future resource rents over the expected life of the asset. It then discounts those future rents to their present value.
Proposed Methodology Dashboard
| Component | Proposed treatment |
| Resource scope | Proved coal and lignite |
| Valuation method | Net Present Value |
| Rent method | Residual Value Method |
| Main source | National Accounts Statistics |
| Capital return | “Everything but” approach |
| Rent smoothing | Historical moving average |
| Extraction path | Latest extraction held constant |
| Stock valuation | Discounted future resource rents |
| Sensitivity rates | 6%, 8% and 10% |
| Preferred framework | OECD 2025 methodology |
What the Discussion Paper Gets Right
It Moves India Beyond Physical Resource Reporting
The paper correctly recognises that physical quantity alone cannot represent economic value. Two coal deposits may contain the same tonnage but have very different extraction costs, coal grades, transport requirements and commercial prospects.
For example, a shallow deposit near rail infrastructure may generate a much higher economic rent than a deeper deposit in an environmentally sensitive or poorly connected area. Therefore, counting both deposits only in tonnes hides their economic differences.
Monetary asset accounting can address this problem. Moreover, it can allow policymakers to compare coal wealth with other forms of national capital, including infrastructure, machinery and financial assets.
It Separates Coal Revenue From Natural-Resource Rent
The paper also correctly avoids treating total coal sales as the value of the coal resource. Coal production requires employees, equipment, transport systems, buildings and other produced assets, all of which earn their own economic returns.
Therefore, the model deducts operating costs, depreciation and a normal return on produced capital. Only the residual surplus is attributed to the underground resource.
This distinction strengthens the framework. Without it, the account would wrongly treat income generated by labour, machinery and business organisation as income generated by nature.
It Compares Competing International Methods
Instead of selecting one foreign model without scrutiny, the paper compares the OECD, World Bank and Philippines approaches. This comparison helps reveal how different assumptions can produce substantially different estimates from the same physical stock.
The OECD model relies more heavily on national accounts and price smoothing. By contrast, the World Bank model uses international commodity prices, mine-level cost databases and several estimates drawn from regional or global averages.
The Philippines approach offers useful country-level experience. However, some of its required financial variables are not readily available in India’s public statistical system.
Therefore, the paper reasonably concludes that the OECD method provides the most practical starting point. It also keeps the proposed account connected to India’s existing national accounting structure.
It Recognises the Importance of Sensitivity Analysis
The paper correctly acknowledges that natural-resource valuation depends heavily on assumptions. Changes in the discount rate, resource rent, extraction profile or reserve life can sharply alter the final value.
Consequently, the paper recommends sensitivity analysis rather than presenting one number as unquestionable truth. This is especially important because an apparently technical valuation can influence mining policy, public finance and energy-transition decisions.
However, sensitivity analysis must be broad enough to reveal real uncertainty. Testing only a narrow group of similar assumptions would create the appearance of transparency without fully showing the range of possible outcomes.
It Prefers Indian Statistical Data Over Imported Estimates
The paper identifies several weaknesses in applying the World Bank model directly to India. In particular, the World Bank methodology relies partly on international benchmark prices, private cost databases and older Indian cost studies.
For countries without complete data, that framework may also use regional or global averages. Although such estimates help international comparison, they may fail to capture India’s coal quality, labour structure, transport system and public-sector pricing arrangements.
Therefore, MoSPI is right to prefer domestic national-account data for the official Indian account. Nevertheless, it should still use international estimates as an external check against extreme or implausible results.
The First Major Limitation: No Monetary Value Has Been Calculated
Despite its detailed formulas, the paper does not produce an actual rupee value for India’s coal stock. It explains the accounting architecture, identifies possible data sources and recommends a preferred approach.
Therefore, readers cannot yet assess whether the proposed framework produces reasonable results. They also cannot examine the size of annual depletion, revaluation, discoveries or other changes in monetary terms.
This omission is significant because a methodology may appear sound in theory but fail during implementation. For example, the calculation may produce unstable rents, negative values, unrealistic asset lives or large changes caused by revisions in a single input.
Accordingly, MoSPI should release an experimental time series before final adoption. That pilot should show the opening stock value, additions, extraction, sterilisation, revaluation and closing stock value for at least five years.
The Top-Down Allocation Method Is Practical but Fragile
India’s National Accounts Statistics do not provide every required variable separately for coal. Consequently, the paper proposes estimating coal-specific operating surplus and fixed capital by applying coal’s share of total mining output to the wider mining and quarrying aggregates.
This approach offers an administratively convenient starting point. However, it assumes that coal’s share of mining output broadly reflects its share of mining profits, fixed assets and capital costs.
That assumption may not hold. Coal mining can differ substantially from iron ore, bauxite, limestone and other mining activities in its labour structure, overburden-removal costs, transport systems, equipment requirements and regulatory obligations.
Moreover, output value and profitability do not necessarily move together. A mineral may account for a large share of output while generating a smaller share of operating surplus because its extraction and transport costs are higher.
Therefore, proportional allocation may overstate or understate coal resource rent. MoSPI should compare the top-down estimate with company accounts, mining surveys and mine-level cost information before treating the figure as statistically reliable.
Combining Raw Coal and Lignite Weakens Economic Accuracy
The paper combines raw coal and lignite because the National Accounts Statistics do not provide enough separate information. Although this decision may simplify the initial exercise, it weakens the economic meaning of the resulting account.
Lignite generally differs from higher-grade coal in moisture, heat content, transport economics and industrial use. Similarly, coking coal and non-coking coal serve different markets and may command substantially different economic values.
Therefore, a common unit resource rent cannot accurately represent every tonne. A tonne of high-quality coking coal cannot automatically carry the same in-situ value as a tonne of low-grade lignite.
The discussion paper itself accepts that deposit-level valuation would better capture variations in extraction cost. Nevertheless, its proposed national aggregate method moves in the opposite direction by merging resources with distinct economic characteristics.
Accordingly, MoSPI may begin with a combined pilot, but it should not make that aggregation permanent. The final account should separately value coking coal, non-coking coal and lignite.
Coal Valuation Requires Better Geological Classification
The physical asset account shows that proved closing stock increased from 75,819 million tonnes in 2016 to 120,796 million tonnes in 2024. Thus, proved stock rose by approximately 59.3% during a period in which annual extraction also increased.
At first glance, this result may appear to show that India discovered coal faster than it extracted it. However, increases in proved stock can also result from better exploration, improved geological confidence, revised economic feasibility or reclassification of previously known resources.
The table records large annual additions under “discoveries.” At the same time, it records zero upward reappraisals and zero reclassifications throughout the period.
That pattern requires a fuller explanation. If known resources moved from indicated or inferred categories into the proved category, the account should classify the change as reappraisal or reclassification rather than a new discovery.
ABC Live’s analysis of the GSI Exploration Action Plan 2026–27 explained why India must distinguish geological identification from commercially usable reserves. Therefore, MoSPI should publish a reconciliation showing how much of each annual addition came from new deposits, improved surveys, changed feasibility or revised classification.
Physical Account Trend
| Indicator | 2016 | 2024 |
| Closing stock | 75,819 MT | 120,796 MT |
| Recorded discoveries | 6,832 MT | 12,756 MT |
| Extraction | 682 MT | 1,039 MT |
| Sterilisation loss | 2,513 MT | 3,835 MT |
The figures show that closing stock increased even after extraction and sterilisation losses. However, without a transparent classification of additions, the account may overstate the role of genuinely new discoveries.
Sterilisation Losses Are the Paper’s Most Important Unresolved Issue
The physical account applies a sterilisation-loss ratio of approximately 3.7 tonnes for every tonne of raw coal extracted and approximately 3.46 tonnes for every tonne of lignite extracted. Consequently, the recorded sterilisation loss substantially exceeds actual extraction.
In 2024, the table records extraction of 1,039 million tonnes and sterilisation loss of 3,835 million tonnes. Therefore, total reductions amounted to 4,874 million tonnes, of which sterilisation represented approximately 78.7%.
This result has enormous implications. Under the paper’s accounting approach, most of the annual decline in proved stock does not arise from coal that generates income through extraction; instead, it arises from coal treated as inaccessible or lost because of mining operations.
However, sterilisation is not necessarily a uniform or permanent geological event. It may depend on mine design, safety pillars, extraction technology, geological conditions, environmental restrictions and future recovery methods.
Therefore, a fixed national multiplier may convert a technical planning assumption into an apparently permanent loss of national wealth. MoSPI should validate the ratio against mine-level evidence and explain whether the affected coal is permanently destroyed, economically inaccessible or only unavailable under current technology.
The Paper Contains an Asset-Life Tension
The general methodology defines asset life through the reserve-to-extraction ratio. Using the 2024 figures, dividing proved closing stock of 120,796 million tonnes by extraction of 1,039 million tonnes produces a conventional reserve-to-extraction period of approximately 116 years.
However, the paper later recommends projecting sterilisation losses alongside extraction. If both 2024 extraction and sterilisation continue at constant levels, annual stock reduction reaches 4,874 million tonnes.
Under that broader reduction path, the same physical stock would be exhausted in approximately 25 years rather than 116 years. Therefore, the treatment of sterilisation changes the implied asset horizon by more than nine decades.
This is not a minor technical difference. Since the model discounts future resource rents over the asset life, the chosen horizon can sharply change the estimated present value.
Accordingly, the final methodology must state whether asset life means years of extractive production or years until physical stock reaches zero after all reductions. It must also explain how sterilised coal affects future extraction without itself generating resource rent.
The Proposed Discount Rates Require Stronger Justification
The paper notes that the OECD recommends a stable real discount rate of 2%, while the World Bank applies 4%. Nevertheless, MoSPI’s expert group recommends sensitivity analysis using 6%, 8% and 10%.
Higher discount rates substantially reduce the present value of income expected in later years. Therefore, a 10% rate gives very little weight to rents expected several decades in the future.
The paper explains that the proposed range seeks to balance coal’s near-term energy role with sustainable use. However, a discount rate should primarily reflect time, risk and the valuation perspective.
Sustainability policy should not be hidden inside the discount rate. Instead, MoSPI should represent sustainability through alternative extraction paths, environmental accounts and intergenerational reporting.
Moreover, the paper distinguishes private or market-based rates from social discount rates. Therefore, combining the two perspectives in one unexplained range may create conceptual confusion.
MoSPI should publish results at 2%, 4%, 6%, 8% and 10%. It should then label each result clearly as an OECD benchmark, World Bank benchmark, domestic market scenario or policy sensitivity scenario.
The Rate of Return and Discount Rate Must Not Be Confused
The paper recommends the “Everything but” approach for calculating the normal return on produced assets. This approach excludes sectors in which natural resources generate part of the operating surplus, thereby reducing circularity.
Conceptually, this is a strong choice. However, data gaps prevent India from applying every exclusion recommended by the OECD with full precision.
As a result, the Indian version would exclude broad sectors such as agriculture, mining and public administration while approximating other exclusions. Therefore, the calculated return may still contain distortions from sector composition and data aggregation.
In addition, the return on produced capital and the discount rate perform related but distinct roles. The first helps separate the return earned by machinery and other produced assets from the resource rent, while the second converts future resource rents into present value.
If both rates are increased to reflect the same perceived risk, the model may deduct risk twice. Therefore, MoSPI should explain their relationship and prevent double-counting.
A Constant Extraction Path Is Not Credible Over Several Decades
The preferred OECD method projects future extraction by holding the latest annual extraction level constant until the asset reaches the end of its economic life. This assumption provides a transparent baseline, but it cannot represent India’s likely long-term energy path.
Coal demand will depend on electricity consumption, industrial growth, renewable generation, storage capacity, nuclear power, environmental rules and carbon regulation. Moreover, mining costs may rise as easier deposits are exhausted and extraction moves towards more difficult locations.
ABC Live’s Critical Analysis of India’s New NDC for 2031–2035 found that India is adding non-fossil capacity rapidly, although coal continues to frame the near-term power reality. Therefore, neither permanent coal growth nor immediate coal disappearance provides a credible single forecast.
Likewise, India’s Energy Storage Strategy for Grid Stability shows why the pace of coal substitution will depend on storage, transmission and grid flexibility. Consequently, the valuation must connect with actual energy-system scenarios rather than a mechanical constant-extraction assumption.
Extraction Scenarios MoSPI Should Publish
| Scenario | Main assumption |
| Baseline | Recent extraction remains constant |
| High demand | Extraction rises with industrial demand |
| Managed transition | Coal use declines gradually |
| Fast transition | Renewables, storage and nuclear expand faster |
| Cost pressure | Extraction falls as marginal costs rise |
A scenario-based account would show how much of the coal asset value depends on geology and how much depends on future policy. Moreover, it would reveal the share of proved reserves that may become stranded before extraction.
Proved Reserves Are Not Guaranteed Future Income
A resource may satisfy current geological and commercial tests but still fail to generate future rent. For example, changes in technology, demand, environmental law or electricity economics may make extraction uneconomic.
Therefore, proved reserves should not be interpreted as guaranteed production. The monetary value exists only to the extent that future extraction remains technically feasible, legally permissible and commercially viable.
ABC Live’s report on How India Can Secure Its Energy Future from 2025 to 2070 explains why India’s long-term energy path will require a balance between reliability, affordability, renewable power and nuclear generation. As that balance changes, the income expected from coal must also change.
Similarly, ABC Live’s analysis of India’s New Nuclear Energy Act 2025 examined how dependable nuclear power may reduce long-term coal demand. Therefore, the account should identify the value exposed to substitution and transition risk.
Three Years of Price Smoothing May Not Be Enough
The OECD framework permits smoothing resource rents across several years, generally within a range of three to ten years. The paper illustrates how India may use a three-year period.
Price smoothing is necessary because coal prices, costs and operating surpluses can move sharply. However, a short three-year window may still capture exceptional price shocks rather than long-term economic conditions.
Moreover, coal markets can pass through multi-year cycles. A three-year average may therefore remain highly sensitive to the selected starting and ending years.
MoSPI should publish three-year, five-year and ten-year smoothed results. It should also explain how extraordinary economic disruptions affect the chosen window.
Market Value Is Not the Same as Social Value
The paper correctly states that national accounting seeks market or market-equivalent value rather than welfare value. Therefore, the proposed coal figure will measure expected economic income from extraction.
However, it will not automatically deduct the full social and environmental costs of coal. These may include air pollution, greenhouse-gas emissions, water stress, land degradation, mine fires, ecosystem damage, rehabilitation costs and public-health effects.
Consequently, a coal deposit may have a high monetary asset value even when its extraction creates substantial costs outside the mining company’s financial accounts. The final number must therefore carry a clear explanation of its boundary.
ABC Live’s analysis of the State of Finance for Nature 2026 showed how financial systems often value extraction while treating ecological damage as an external cost. Therefore, India should publish environmental liabilities alongside the monetary coal account.
Two Accounts India Needs
| Account | What it measures |
| Coal monetary asset account | Expected market income from the resource |
| Environmental liability account | Pollution, restoration and ecological costs |
Publishing both accounts would prevent policymakers from treating gross extractive value as net social wealth. Moreover, it would show whether coal income is sufficient to repair the environmental and economic damage associated with depletion.
Carbon Policy Can Change Coal’s Monetary Value
India’s emerging carbon-market system may gradually affect coal-based electricity and industry. Carbon pricing, emissions standards and climate-linked trade measures can increase compliance costs or change demand for coal-intensive products.
ABC Live’s report on India’s Carbon Credit Trading Scheme explains how climate policy is becoming connected with industrial standards, exports and market access. Therefore, future coal rents may depend partly on the cost and credibility of carbon compliance.
However, the discussion paper does not incorporate a carbon-cost scenario. It also does not explain how future environmental regulation may affect extraction costs, electricity demand or resource rent.
Accordingly, MoSPI should include at least one policy-adjusted scenario. That scenario should examine how carbon prices, emission limits and cleaner industrial technology may affect the monetary value of coal.
Resource Rent May Reflect Policy Structure, Not Only Natural Scarcity
The Residual Value Method assumes that the surplus remaining after production costs and normal capital returns belongs to the natural resource. However, the coal economy does not operate under perfectly competitive conditions.
Government pricing decisions, railway freight, royalties, taxes, levies, subsidies, auction terms and public-sector objectives can all influence recorded operating surplus. Consequently, the residual may reflect institutional design as well as geological scarcity.
A low resource rent may therefore indicate inefficient extraction, high transport costs or policy-driven charges rather than low resource value. Conversely, a high rent may result from administered pricing or market concentration rather than exceptional geological quality.
Therefore, MoSPI should triangulate the residual estimate with royalty payments, auction premiums, mine-level margins and access prices. Large differences should trigger review before publication.
The Informal-Sector Argument Needs Coal-Specific Evidence
The discussion paper notes that company-account methods may underestimate mining activity because informal operators can fall outside the formal reporting system. This concern may apply strongly to several minor minerals and fragmented mining activities.
However, coal production is more concentrated and heavily regulated than many other mining activities. Therefore, the size and importance of unrecorded coal production should be measured rather than assumed from general mining-sector conditions.
If the formal sector already captures most coal output, company and enterprise data may provide a stronger verification source than the paper suggests. Consequently, MoSPI should assess coal-sector informality separately before using it to justify a broad top-down allocation method.
National Aggregation Conceals State-Level Costs
Coal extraction remains geographically concentrated. Therefore, the benefits, depletion and environmental burdens do not fall equally across India.
A national account may show rising coal wealth while a particular mining district experiences land degradation, displacement, water stress and future mine-closure liabilities. Similarly, mining revenue may flow nationally while many long-term costs remain local.
Therefore, MoSPI should develop state-level accounts after completing the national pilot. State accounts would help governments assess whether mining regions receive enough investment to replace depleted natural capital.
They would also support more credible District Mineral Foundation planning, mine-closure funding and regional economic transition. Consequently, national valuation should become the first layer of the system rather than its final level.
Revaluation Could Dominate the Annual Account
The proposed framework separates physical changes from revaluation caused by changes in the in-situ price. This is correct under environmental-economic accounting.
However, the in-situ price depends on estimated rent, extraction assumptions, capital returns and discount rates. Therefore, a methodological revision may create a large paper gain or loss even when no physical change occurs underground.
This could confuse public interpretation. A sudden increase in recorded coal wealth may reflect a higher estimated rent rather than a geological discovery.
Accordingly, every annual account should separately explain physical additions, physical reductions, price changes and methodological revisions. Moreover, MoSPI should avoid presenting revaluation gains as newly created natural wealth.
The Model Needs an Uncertainty Range, Not Only Sensitivity Tables
Sensitivity analysis changes selected assumptions and compares the results. However, it does not necessarily show the combined uncertainty across all variables.
Coal valuation depends simultaneously on extraction, prices, costs, discount rates, capital stocks, sterilisation and asset life. Therefore, uncertainty can compound across the model.
MoSPI should publish a central estimate, a lower range and an upper range. It should also identify which variables contribute most to the spread.
This approach would improve public understanding. Moreover, it would discourage the use of one apparently precise figure in political or fiscal claims.
ABC Live Critical Scorecard
| Area | Assessment | Score |
| SEEA alignment | Strong conceptual base | 8.5/10 |
| Method selection | Practical and defensible | 8/10 |
| Data separation | Major gaps remain | 5/10 |
| Physical classification | Needs reconciliation | 5/10 |
| Sterilisation treatment | Insufficiently resolved | 4/10 |
| Discount-rate design | Wider testing required | 5.5/10 |
| Climate scenarios | Largely missing | 3.5/10 |
| Environmental costs | Outside the model | 3/10 |
| Implementation readiness | Suitable for pilot stage | 6/10 |
| Policy potential | High after refinement | 7.5/10 |
What MoSPI Should Change Before Final Adoption
Publish a Complete Numerical Pilot
MoSPI should first publish an experimental monetary asset account covering at least five years. The pilot should disclose every major input, formula and adjustment.
Moreover, the ministry should release calculation sheets in a machine-readable format. This would allow economists, statisticians and environmental researchers to reproduce the results.
Separate Coal Types
The final account should distinguish coking coal, non-coking coal and lignite. Thereafter, MoSPI should move towards state-level and deposit-level valuations.
Although national aggregation may support the first pilot, permanent aggregation would hide crucial differences in quality, cost and commercial use. Therefore, disaggregation should form part of a published implementation roadmap.
Clarify Discoveries and Reappraisals
MoSPI should audit the physical account and explain why all major additions appear under discoveries. It should separately report new geological discoveries, upward reappraisals and reclassifications.
This change would strengthen both the physical and monetary accounts. Moreover, it would prevent improved geological knowledge from being presented as newly created resources.
Reassess Sterilisation Losses
The ministry should verify sterilisation ratios through mine-level studies and technical audits. It should also distinguish permanently lost coal from coal that remains technically recoverable under different mining methods.
Furthermore, MoSPI should clarify how sterilisation affects asset life and monetary valuation. Without this clarification, the model may produce radically different depletion horizons.
Expand Discount-Rate Testing
The final publication should show results at 2%, 4%, 6%, 8% and 10%. Each rate should carry a clear economic explanation.
Moreover, the ministry should separate market-based valuation from intergenerational or social-policy analysis. A single unexplained discount rate cannot serve both purposes equally well.
Replace One Extraction Forecast With Scenarios
Constant extraction should remain only as a transparent baseline. MoSPI should also model high demand, managed transition, rapid transition and rising-cost scenarios.
These scenarios should incorporate the growth of renewables, storage and nuclear power. They should also account for climate policy and the possibility that some proved reserves may never generate income.
Triangulate the Resource-Rent Estimate
The top-down national-account estimate should be checked against company data, royalties, auction premiums and mine-level operating margins. This comparison would reveal whether proportional allocation creates systematic bias.
If the estimates diverge sharply, MoSPI should publish the reasons. Moreover, it should revise the model rather than selecting the most convenient result.
Publish Environmental Liabilities Alongside Asset Value
The coal account should be accompanied by separate accounts for land degradation, water impacts, emissions, mine closure and rehabilitation. Although these costs fall outside the market-value boundary, policymakers need them to interpret the asset figure responsibly.
ABC Live’s Critical Review of India’s Green Transformation found that environmental progress must be tested through measurable ground outcomes rather than headline claims. Therefore, coal wealth should never be reported without the liabilities connected with extracting it.
Create State-Level Resource Balance Sheets
After the national pilot, MoSPI should prepare state-level coal asset and depletion accounts. These accounts would show which regions generate natural-resource income and which regions bear long-term environmental and economic costs.
Furthermore, state accounts could help design transition funds for mining-dependent districts. They would also show whether extracted wealth is being reinvested in durable public assets.
Proposed Revised Framework for India
| Stage | Recommended approach |
| Physical stock | Separate coal, coking coal and lignite |
| Classification | Distinguish discovery and reappraisal |
| Resource rent | OECD top-down estimate plus verification |
| Capital return | Refined “Everything but” method |
| Price smoothing | Compare 3, 5 and 10 years |
| Asset life | Publish with and without sterilisation |
| Extraction | Use multiple policy scenarios |
| Discounting | Test 2% to 10% |
| Climate risk | Add transition and carbon-cost cases |
| Geography | National, state and major-deposit accounts |
| Disclosure | Release data and calculation sheets |
| Companion account | Publish environmental liabilities |
ABC Live Assessment
MoSPI’s discussion paper represents an important institutional advance. It provides India with a structured route from physical mineral statistics to monetary natural-capital accounting.
Moreover, the decision to use an OECD-based framework is broadly sound. The method connects with the National Accounts Statistics, smooths volatile rents and provides a clear structure for opening stock, additions, depletion, revaluation and closing stock.
However, methodological consistency alone cannot guarantee an accurate number. The result will remain only as reliable as the data, classification and assumptions placed inside the model.
The most serious concern is the treatment of sterilisation losses. Since sterilisation accounts for most recorded annual stock reduction, it can transform the estimated asset life and sharply alter the present value.
Similarly, combining coal and lignite, allocating sectoral income through output shares and applying constant extraction over several decades weaken the economic realism of the framework. High discount rates may further reduce the value assigned to distant future rents.
Most importantly, the account will measure expected market income rather than net social benefit. Therefore, it cannot answer whether coal extraction makes India wealthier after pollution, ecological damage, rehabilitation and climate costs are considered.
India should adopt the proposed framework as an experimental benchmark. However, MoSPI should not publish one headline coal-wealth figure until it has released alternative discount rates, extraction scenarios, uncertainty ranges and environmental companion accounts.
A credible coal asset account must explain not only how much India may earn by extracting coal. It must also show how much natural wealth disappears, how much coal may never become commercially usable and whether the income from depletion creates durable assets for future generations.
How ABC Live Verified This Report
ABC Live reviewed the complete MoSPI discussion paper titled Methodological Approaches for Compilation of Monetary Asset Accounts of Coal in India. The review covered the conceptual framework, physical asset table, resource-rent methodology, discount rates, extraction assumptions and comparison of international approaches.
ABC Live also examined the paper’s conclusions on the OECD methodology, the “Everything but” rate of return and the incorporation of sterilisation losses. Thereafter, the physical figures were used to calculate selected percentage changes, reduction shares and alternative stock-life indicators.
The approximate 116-year figure represents the conventional closing-stock-to-extraction ratio. By contrast, the approximate 25-year figure uses both 2024 extraction and recorded sterilisation loss as annual reductions.
Sources and Resources
Primary Document
Related ABC Live Reports
| ABC Live report | Relevance |
| India’s Energy Reality 2026 | Coal dependence and energy data |
| India’s Energy Future, 2025–2070 | Long-term energy-security scenarios |
| India’s New NDC for 2031–2035 | Climate commitments and coal demand |
| India’s Energy Storage Strategy | Renewable reliability and grid transition |
| India’s Carbon Credit Trading Scheme | Carbon pricing and industrial policy |
| GSI Exploration Action Plan 2026–27 | Geological classification and exploration |
| State of Finance for Nature 2026 | Natural wealth and harmful financial flows |
| India’s New Nuclear Energy Act 2025 | Nuclear power and coal substitution |
| How India Generates More Clean Energy Than Fossil | Non-fossil capacity and energy transition |
| India’s Green Transformation | Verification of environmental claims |
The Peepal Note
The Peepal views coal accounting as both an economic and ecological governance issue. Monetary valuation can improve public understanding of depletion, but it should not convert environmental loss into a purely financial figure.
Therefore, India must publish coal-asset values alongside pollution, restoration, water, land and mine-closure indicators. Only then can natural-capital accounting support ecological responsibility as well as economic planning.
ABC Live — Making Complex Public Issues Simple.