The ACG will publish a report on natural resource accounting in November 2022

The Comptroller and Auditor General of India said on Friday that he will submit the Natural Resource Accounts (NRA) report by November 2022.

Recognizing the importance of natural resources, there has been an attempt to develop accounting systems to help monitor their responsible use, which in turn will lead to sustainability.

The UN has adopted (2012) the System of Environmental-Economic Accounting (SEEA) – Central Framework which is the latest internationally accepted framework for NRAs. The NRA has strong links with the SDGs since 4 of the 17 goals are directly related to natural resource management and accounting.

India is a signatory to the United Nations General Assembly resolution titled “Transforming our world; the 2030 Agenda for Sustainable Development” (25 September 2016) with the endorsement of over 190 countries which demands the preparation of natural resource accounts.

About 30 countries such as Australia, Canada, China, France and Germany have achieved varying degrees of success in adopting environmental accounting while many others are trying to catch up.

According to the CAG Government Accounting Standards Advisory Board (GASAB) was constituted by the CAG of India in 2002 with representation from all GoI accounting departments, regulatory authorities such as RBI, ICAI and rotating state governments to improve government accounting standards and financial reporting to improve the quality of decision-making and public accountability.

India’s CAG is a member of an international body of supreme audit institutions, called WGEA (Working Group on Environmental Auditing), which has suggested (2010) that audit institutions should help their countries adopt natural resource accounts.

The GASAB prepared a concept paper on the NRA in July 2020, among others, envisaging short, medium and long term objectives from 2020, the first objective of which was the preparation of asset accounts on mineral and energy resources , more importantly non-renewable and finite resources, which would ultimately help build resilience to environmental issues such as climate change. In addition to the preparation of the document, the GASAB and the CAG have decided to continue their commitment to assisting state governments in the preparation of asset accounts, which is the first of four steps in the preparation of natural resource accounts. To begin with, a broad advisory group was formed (August 2020) comprised of stakeholder Ministries such as MoMines, MoEFCC, MoSPI, MoPNG, MNRE, Specialized Agencies such as Indian Bureau of Mines, ICAI, ICMAI, TERI, NRSC, GSTN, etc. and five State Governments and the Eminent Retired Ecologist and Bureaucrat Mukul Sanwal, IAS 1971.

State NRA cells have also been formed in all 28 States and 2 UTs (Delhi and JK) with a unique collaboration of Accountants General (Audit, A&E) and State Government Departments to drive the project.

In line with the action plan envisaged in the concept paper, GASAB prepared the asset account models for mineral and energy resources and field-tested them in three states through pilot studies. They were then examined by the experts of the Advisory Committee.

The templates were then distributed to the States for the preparation of asset accounts. Following the Prime Minister’s statement on the Panchamrits at COP 26, GASAB included a specific chart to track progress towards achieving some of these goals.

The GASAB has kept the states working through the state accountants general with strenuous efforts and monthly meetings to monitor progress and address challenges in this task. It has also made intensive capacity building efforts to put in place processes to prepare these accounts in a sustainable manner.

To date, all 28 states and 1 UT (J&K) have prepared asset accounts for 2020-21. They are verified and validated by various stakeholders, including state governments and our field offices.

To ensure automated data collection and compilation from 2022-23, GASAB has developed SOPs to guide States. Besides data flow, the guidelines and SOPs also suggest recommendations for end-to-end mapping of resource supply and use that would help states mop up resource revenue and also plug leaks and waste.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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