This article is more than 2 years old.

August 11, 2016 This article is more than 2 years old.

India has decided to put a financial value on its forests: Rs115 trillion, or an astounding $1.7 trillion.

This is lower than India’s GDP, pegged at $2.1 trillion, but higher than the GDPs of countries such as Canada, Korea, Mexico or Russia.

The valuation was arrived at by an expert panel that the Indian government set up in 2013. The committee was asked to decide on the net present value (NPV) of forest land in case they had to be diverted for industrial or construction purposes.

“The numbers are definitely shocking,” Madhu Verma, a professor at the Indian Institute of Forest Management (IIFM), and one of the two lead authors of the report, said. “The moment you put a value to these forestlands is when people take these concerns (regarding diverting forest land) seriously.”

India’s environment ministry has now approved the committee’s report, the Hindustan Times reported.

Since 1980, the Indian government has approved the diversion of 1.29 million hectares of forestland for non-forest purposes. India has a total forest area of seven lakh square kilometres, which grew by 0.54% over the past two years. The new report pegs the NPV between Rs9.87 lakh and Rs55.55 lakh per hectare.

“Using 14 forest type groups and four forest canopy cover classes, 56 classification units have been formed for the estimation of the economic value of forests,” the report said on its method of calculation.

Saving Indian forests

In India, private companies and other agencies are made to pay a fee to the government in return for allowing them to set up projects on forest land. As per the rules, these “user agencies” have to deposit money for compensatory afforestation, besides paying the net present value.

The money deposited is then collected in a common government pool, after which it will be given out to states for various afforestation schemes.

In May, the Narendra Modi government had decided to amend a crucial law on the compensatory afforestation methods. The new law looks to increase India’s forest cover from 21.34% of the total land to 33%. It also states that the state governments be provided 90% of funds from the common pool, while the remaining will be kept with the central government.

But, all that may still not be enough.

“You can’t really replace forests,” said Verma. “It is not a product that can be sold in the market in return for something.”