Developing countries like India are facing the problem of protecting the environment, and promoting economic development simultaneously. A trade-off between environmental protection and development is required. For this purpose, environmental accounting is required to measure the impact on the environment caused by the economic activities of the corporate sector. Environmental accounting can either be in descriptive or quantative manner or both. A standard system of this type of accounting is still in process. In the Indian context, the corporate sector is not very enthusiastic in this regard. Wherever they are bound to fulfill the legal requirement as per the applicable Law/Act, they do so to avoid any litigation. Otherwise, the corporate sector is not serious enough towards environmental protection; therefore, it is quite obvious that they are not interested in environmental accounting.

Now, some corporate units have been describing some cost and benefit figures related to environmental impact in their directors report. Some sincere efforts, both at the government and corporate level, are required to develop environmental accounting in the national interest at large. Although it is true that this type of accounting cannot be developed like financial accounting due to its own limitations, it can be developed up to a remarkable level, which will fulfill the need of economic development with environmental safety.

This article is an attempt to describe the concept of environmental accounting and practice in India along with suggestions to develop it.

Every business has an overriding responsibility to make the fullest possible use of its resources both human and material. An enterprise is a corporate citizen. Like a citizen it is esteemed and judged by its actions in relation to the community of which it is a member as well as by its economic performance. As far as Indian corporate sector is concerned, it is bitter but true that it has not been performing as a good citizen that's why there are so many laws laid down and further amended time to time as and when required to bind the corporate sector to fulfill their social responsibilities for the better development of Indian Economy.

Responsibility towards environment has become one of the most important and crucial areas of social responsibility. Recent years have witnessed rising concern for environmental degradation, which is taking place mainly in the form of pollution of various types, viz., air, water, sound, soil erosion, deforestation, etc. It is a world wide phenomenon. It spoils human health, reduces productivity and leads to loss of amenities.

Accounting World Magazine, Economic Development, Environmental Accounting, Environmental Protection, Indian Economy, Social Responsibilities, Corporate Sector, Environmental Degradation, Gross Domestic Products, GDP, United Nations Environment Program, UNEP, System of Integrated Environmental and Economic Accounting, SEEA, Business Organizations, Environmental Management Accounting, EMA, Financial Accounting.