Indian Resource Panel (InRP), 2015: From Resource Consumption To Resource Productivity.

Policy Update
Saachi Saxena

Background

Economic growth is usually measured in terms of output, income and investment. But behind this growth lies a less visible physical economy that depends on minerals, metals, energy, land and other natural resources. For a country such as India, where economic expansion means urbanisation, industrialisation and rising consumption the challenge is not just to increase production but also to ask how efficiently the resources needed for that production are being used.

This was the policy backdrop against which the Indian Resource Panel (InRP) was established in November 2015 under the Ministry of Environment, Forest and Climate Change (MoEFCC). The panel was formally announced on 18 November 2015 and brought together ten members representing government, industry, research and civil society.

The ten members listed by the Press Information Bureau included four former government secretaries, along with representatives from institutions such as the Bureau of Energy Efficiency (BEE), the Centre for Science and Environment (CSE), the Confederation of Indian Industry (CII), the Environmental Management Centre (EMC), reflecting its multi-stakeholder composition (PIB, 2015). Its stated purpose was to create a policy environment for recycling, promote sustainable resource use and help decouple economic growth from environmental degradation.

The problem was already visible in India’s input-resource economy. India’s per-capita material consumption was among the lowest globally, but its absolute material consumption had risen sharply (Development Alternatives, 2016). Material demand refers broadly to the quantity of materials required by the economy, including biomass, fossil fuels, minerals and metals.

Drawing on estimates from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and The Energy and Resources Institute (TERI), Development Alternatives reported that India’s total material demand was around 2 billion tonnes at the time and was projected to exceed 4 billion tonnes by 2030, assuming an annual GDP growth rate of 8% (Development Alternatives, 2016). It was further projected to approach 10 billion tonnes by 2050 under an assumed annual GDP growth rate of 6% (Development Alternatives, 2016).

The pressure was particularly relevant because India’s growth model was becoming increasingly resource-intensive. The InRP consultation noted that while the economy was growing at more than 7%, production and consumption were becoming increasingly resource-intensive. It also highlighted supply bottlenecks and price spikes in resources such as sand and iron ore. For some critical resources, including nickel and copper, India was more than 90% import-dependent, highlighting the economic risks associated with rising resource demand (Indian Resource Panel [InRP], 2016).

The case for resource efficiency, therefore, was not limited to environmental concerns. Resource productivity could potentially allow India to generate more economic value from each unit of material while also reducing its vulnerability to resource scarcity, import dependence and disruptions in supply.

Functioning

The InRP was set up as an advisory body, rather than as a regulatory institution. Its broad objective was to advise the Government of India on building a framework that could improve the productivity of primary raw materials and make better use of secondary resources (Development Alternatives, 2016).

Its agenda had four principal dimensions.

First, it was expected to contribute to the development of a legislative framework for secondary-resource utilisation.
Second, it was to provide recommendations on resource efficiency.
Third, it was expected to develop an action plan for sustainable secondary-resource management and material resource efficiency.
Finally, it was intended to serve as a platform for information campaigns and high-level discussions on India’s resource transformation (Development Alternatives, 2016).

At the heart of this approach was the idea of resource decoupling. Resource decoupling means reducing the quantity of primary resources required per unit of economic activity. The objective is therefore not necessarily to lower production, but increase output generation from a given resource base.

The InRP’s functioning was supported by Indo-German cooperation. A three-year project implemented jointly by GIZ and MoEFCC focused particularly on minerals and metals because of their importance to India’s rapidly growing economy. The initiative aimed to strengthen the institutional framework for resource efficiency and improve the management of secondary resources (InRP, 2016).

The InRP adopted a multi-stakeholder approach, which was extended through its December 2016 consultation involving around 46 industry representatives from sectors including cement, automotive, iron and steel, and IT (PIB, 2015; InRP, 2016).

Performance

A key contribution of the InRP was to help move resource efficiency from a broad environmental principle towards a more organised policy agenda. The panel created a forum where resource use could be examined across sectors rather than through isolated waste-management policies. This broader approach brought together questions of material consumption, resource productivity and secondary-resource use within a common policy discussion.

The initial research under the GIZ-supported initiative focused on four areas with significant resource-use implications: mobility, construction and buildings, renewable energy, and resource recovery from e-waste, plastics and packaging. The initiative also proposed studies on future material demand, resource efficiency and resource recovery, along with policy research and capacity building (GIZ, n.d.).

The construction sector illustrates why such sectoral analysis mattered. By 2007, construction had become the second-largest consumer of materials in India, accounting for around 20% of total material demand. Commercial and residential buildings together also accounted for 31% of India’s total energy consumption in 2013–14 (Caleb et al., 2017).

Demand was expected to increase substantially as well. India’s total building floor area was projected to grow from around 1,940 million m² in 2005 to 9,675 million m² by 2030, almost a fivefold increase. Residential buildings were expected to make up 67% of this total floor area.

The InRP’s industry consultations also brought out the economic side of resource efficiency. One assessment reported a 13% Return on Capital Employed for public-sector industries, compared with 6.2% for private-sector industries. At the same time, several resource-intensive industries continued to focus more on expanding production than on improving resource productivity (InRP, 2016).

This was an important conceptual shift, because higher production does not automatically mean better resource productivity. An industry may generate more output and returns while still using increasingly large quantities of physical resources. For the InRP, therefore, the question was not only how much industries produced, but how efficiently they converted scarce resources into economic value.

Impact

The wider impact of the InRP was its attempt to shift the focus from managing waste to managing resources across the life cycle. Waste represents more than what is left after consumption. It also reflects the resources, energy and effort used to extract, process, transport and produce a material. Once it is discarded, much of that embedded value is lost.

This is why the panel also considered secondary raw materials alongside primary resources. The consultation highlighted examples of Indian industries replacing virgin inputs with recovered materials, such as using recycled scrap instead of mined metals and waste-derived alternatives instead of fossil-based inputs. These practices were seen as potential business opportunities because they could offer cost advantages over the longer term (InRP, 2016).

The construction sector offers a useful example. The baseline study found that hollow bricks could reduce raw-material use by 25–60%, mainly through lower soil consumption, while still meeting the relevant Indian Standards for framed construction (Caleb et al., 2017).

The pressure on construction materials was also visible in the growing scarcity of river sand. The annual turnover from illegal sand mining in India was estimated at around INR 10 billion, according to the Centre for Science and Environment (2012). At the same time, demand for aggregates in construction was projected to reach 1,430 million tonnes by 2020. Manufactured sand and recycled construction and demolition waste were consequently emerging as alternatives, particularly in regions facing acute sand scarcity (Caleb et al., 2017).

The InRP thus contributed to a potentially important proposition: secondary materials can be used as inputs into production. The value of resource efficiency comes from keeping material value within the economy for longer duration.

Emerging Issues

The first challenge was measurement. It is difficult to set clear targets for resource efficiency when resource flows are not measured consistently. The construction-sector assessment noted that national-level life-cycle assessments were difficult because inputs and outputs were not measured uniformly. (Caleb et al., 2017).

This also makes it difficult to compare resource productivity across sectors. Economic output is measured in terms of money, while resource use is measured in physical units such as tonnes of materials or units of energy. Without reliable and consistent data, it is difficult to know whether economic growth is using resources more efficiently. Policymakers also need to decide whether to track material and energy use separately or use one broader measure that captures different types of resources together.

The price of primary resources was another concern. The InRP consultation noted that relatively low resource prices in India could weaken incentives for industries to improve efficiency. It contrasted this with Germany, where higher resource costs were cited as one factor supporting stronger efficiency incentives, alongside differences in the wider economic and policy environment (InRP, 2016). This does not mean that prices alone explain differences in resource efficiency. Regulation, technology, industrial structure and environmental policy can also shape firms’ decisions. When resource prices do not reflect scarcity or wider environmental costs, firms may have less incentive to reduce resource use.

Fragmentation was another challenge. Development Alternatives noted that India already had several initiatives involving government, industry, academia and civil society, but there was still a need to better coordinate resource-efficiency efforts across sectors and programmes (Development Alternatives, 2016).

Finally, technology and implementation capacity remained important constraints. Experiences with construction and demolition waste showed that recycling facilities could be technically and financially viable, but scaling them up required appropriate standards, access to technology and stronger institutional capacity. Limited data at the Urban Local Body level also made effective planning more difficult (Development Alternatives, 2016).

Way Forward

The way forward is to address the measurement and data gaps that limit effective resource-efficiency policy. Better resource-flow accounting and more consistent data on material and energy use can help policymakers assess resource productivity across sectors and integrate it into industrial policy, infrastructure planning, trade and investment decisions.

The InRP’s mandate provided a broader policy foundation for this agenda by focusing on improving the productivity of primary raw materials and the use of secondary resources. The subsequent Resource Efficiency Initiative, supported by GIZ and MoEFCC, translated this broader agenda into sector-specific work covering mobility, construction, renewable energy and resource recovery (GIZ, n.d.).

The incentive problem also requires attention. Where low resource prices weaken incentives for efficiency, appropriate fiscal and regulatory measures can encourage firms to reduce resource use and adopt more efficient technologies. The InRP consultation identified fiscal incentives, procurement measures, regulatory standards, pilot projects, capacity building and research among possible measures to support resource efficiency (InRP, 2016).

Fragmented initiatives also point to the need for stronger institutional coordination. Cooperation between central and state governments, industry and other stakeholders can help connect individual resource-efficiency initiatives and support their wider adoption (InRP, 2016).

Finally, weak markets for secondary materials can be addressed through stronger standards and public procurement. Clear quality standards can improve confidence in recovered materials, while government procurement can create more predictable demand for products using secondary resources.

Ultimately, resource efficiency needs to be treated as part of India’s growth strategy. Decoupling means generating greater economic value while reducing the resources required per unit of output. The challenge is therefore to strengthen the data, incentives, institutions and markets needed to make resource productivity an integral part of India’s development process.

Conclusion

The significance of the Indian Resource Panel lies in bringing resource efficiency into India’s broader policy and economic discussion. It shifted attention from simply increasing production and managing waste towards improving the value generated from each unit of resource used. This made resource efficiency relevant not only to environmental policy but also to productivity, incentives and long-term economic growth.

The agenda was subsequently developed through initiatives such as the GIZ-MoEFCC Resource Efficiency Initiative, which examined resource efficiency across mobility, construction, renewable energy and resource recovery (GIZ, n.d.). For India, the broader challenge is therefore not only to grow, but to ensure that growth generates greater economic value while using resources more efficiently.

References

Caleb, P. R., Gokarakonda, S., Jain, R., Niazi, Z., Rathi, V., Shrestha, S., Thomas, S., & Topp, K. (2017). Decoupling energy and resource use from growth in the Indian construction sector: Policy brief I – A baseline study.

170524_giz_igeg_paper-1_rz_01.indd

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. (n.d.). Technical assistance to the Resource Efficiency Initiative.

Technical Assistance to the Resource Efficiency Initiative | GIZ

Development Alternatives. (2016, March). Indian Resource Panel: Fostering resource efficiency in India.

Development Alternatives Newsletter

Indian Resource Panel. (2016). Report: 1st Indian industry consultation on InRP resource mapping on resource efficiency. Development Alternatives, GIZ, and Ministry of Environment, Forest and Climate Change.

Report-1st-Ind_-Consultation-on-InRP-Resource-Mapping-on-RE1.pdf

Ministry of External Affairs. (n.d.). India-Germany joint statement during the visit of Prime Minister to Germany. Government of India.

33569_MEA_annual_Report.pdf

Press Information Bureau. (2015, November 18). Javadekar announces formation of Indian Resource Panel. Ministry of Environment, Forest and Climate Change, Government of India.

Javadekar Announces Formation of Indian Resource Panel

About the Contributor

Saachi Saxena is an undergraduate student pursuing B.A. (Hons.) Economics at Gargi College, University of Delhi. Her research interests include climate economics, public policy, sustainable development, healthcare economics, and development policy. She has actively contributed to policy research and social impact initiatives and is passionate about evidence-based policymaking for inclusive and resilient development.

Acknowledgements

The author is grateful to IMPRI – Impact and Policy Research Institute for providing the opportunity to prepare this policy update. The author sincerely acknowledges the guidance, valuable feedback, and constructive suggestions received from Sneha Kohli and Dolly Kaushik during the review process, which significantly strengthened the quality and analytical depth of this article.

Disclaimer

The views and opinions expressed in this policy update are those of the author and do not necessarily reflect the official position of IMPRI or any affiliated institution. While every effort has been made to ensure the accuracy of the information and data presented, readers are encouraged to verify facts independently before relying on them for any decision-making purpose.