What are National Assets and Resources

Friends,
When we want to evaluate national resources and assets it is necessary to know what they are. Briefly they can be described as under:

What are National Assets and Resources?

By definition, Assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash.

Similarly, a Resource is defined as a source or supply from which benefit is produced. Typically resources are materials or other assets that are transformed to produce benefit and in the process may be consumed or made unavailable. From a human perspective a natural resource is anything obtained from the environment to satisfy human needs and wants. From a broader biological or ecological perspective a resource satisfies the needs of a living organism. Resources have three main characteristics:

·         i)  Utility,

·         ii)  Limited availability, and

·         iii) Potential for depletion or consumption.

Assets are scarce and have to be preserved jealously for the future generations.

Types of National Assets and Resources

Resources can be categorized on the basis of origin:

•           Abiotic resources comprise non-living things (e.g., land, water, air and minerals such as gold, iron, copper, silver).

•           Biotic resources are obtained from the biosphere. Forests and their products, animals, birds and their products, fish and other marine organisms are important examples. Minerals such as coal and petroleum are sometimes included in this category because they were formed from fossilized organic matter, though over long periods of time.

Natural resources are also categorized based on the stage of development:

•           Potential Resources are known to exist and may be used in the future. For example, petroleum may exist in many parts of India that have sedimentary rocks, but until the time it is actually drilled out and put into use, it remains a potential resource.

•     Actual Resources are those that have been surveyed, their quantity and quality determined, and are being used in present times. For example, petroleum and natural gas is actively being obtained from the Mumbai High Fields. The development of an actual resource, such as wood processing depends upon the technology available and the cost involved. That part of the actual resource that can be developed profitably with available technology is called a ‘Reserve Resource’, while that part that cannot be developed profitably because of lack of technology is called a ‘Stock Resource’.  A stock resource can become viable for exploration in future due to price increase, improved technology, etc. and hence need to be safe-guarded zealously.

Natural resources can also be categorized on the basis of renewability:

•     Non-renewable Resources are formed over very long geological periods. Minerals and fossils are included in this category. Since their rate of formation is extremely slow, they cannot be replenished once they are depleted. Out of these, the metallic minerals can be re-used by recycling them, but coal and petroleum cannot be recycled.

•     Renewable resources, such as forests and fisheries, can be replenished or reproduced relatively quickly. The highest rate at which a resource can be used sustainably is the sustainable yield. Some resources, like sunlight, air, and wind, are called ‘Perpetual Resources’ because they are available continuously, though at a limited rate. Their quantity is not affected by human consumption. Many renewable resources can be depleted by human use, but may also be replenished, thus maintaining a flow. Some of these, like agricultural crops, take a short time for renewal; others, like water, take a comparatively longer time, while still others, like forests, take even longer.

Dependent upon the speed and quantity of consumption, over-consumption can lead to depletion or total and everlasting destruction of a resource. Important examples are agricultural areas, fish and other animals, forests, healthy water and soil, cultivated and natural landscapes. Such conditionally renewable resources are sometimes classified as a third kind of resource, or as a subtype of renewable resources. Conditionally renewable resources are presently subject to excess human consumption and the only sustainable long term use of such resources is within the so-called zero ecological footprint, wherein human use less than the Earth's ecological capacity to regenerate.

Natural resources are also categorized based on distribution:

•     Ubiquitous Resources are found everywhere (e.g., air, light, water).

•     Localized Resources are found only in certain parts of the world (e.g., copper and iron ore, geothermal power).

On the basis of ownership, resources can be classified as:

• ·      Individual,
• ·      Community,
• ·      National, and
• ·         International.

Human resources

Human beings, through the labor they provide and the organizations they staff, are also considered to be resources. Human resources is the set of individuals who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view (i.e., the knowledge the individuals embody and can contribute to an organization). Likewise, other terms sometimes used include "manpower", "talent", "labour", or simply "people".

Human resources have vastly different values on the basis of their capabilities, age, health, qualifications, etc like -

i)                    The skills

ii)                   Energies

iii)               Talents, abilities and knowledge that are used for the production of goods or the rendering of  services.

iv)                 Unskilled

v)                  Armed Forces

vi)                 Police

vii)               Administrative

viii)              Political

ix)                 Social Organization (NGOs)

x)                  Students

xi)                 Teachers

xii)               Doctors, CAs, Advocates (Professionals)

xiii)              The professional discipline and business function that oversees an organization's human resources is called human resource management (HRM, or simply HR)

xiv)             Etc.

Infrastructure -

Capital or Infrastructure

In economics, Capital refers to already-produced durable goods used in production of goods or services. As resources, capital goods may or may not be significantly consumed, though they may depreciate in the production process and they are typically of limited capacity or unavailable for use by others.

i)             Public Sector Undertakings built by the Central and State Governments are Capital based National Assets and Resources.

ii)             Hospitals

iii)            Schools

iv)           Markets

v)            Airports

vi)           Docks and ports

vii)          Railway Station

viii)         Bus Depots and stations

ix)           Administrative Offices

x)            Municipal Bazars

xi)           Roads

xii)          Fly overs

xiii)         Bridges

xiv)         Sewage Treatment Plants

xv)          Water Storage tanks

xvi)         Pipe Lines

xvii)        Power Stations

xviii)       Power distribution lines

Tangible versus intangible resources

Tangible resources such as equipment have actual physical existence,

Intangible resources such as Airwaves are Intangible assets having economic value.

Governments have various Intangible Assets in the form of:

i)              Taxing powers,

ii)             Power to grant license to set up Industries,

iii)            Power to conduct business,

iv)           Power to Import or Export and many such other powers.

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Briefly, India’s national assets can be summarized as follows:

A huge land area of 3,287,263 km2  and a long coast line on east and west side (India's coast is 7,517 kilometres (4,700 mi) long;). 

India’s National Assets and Resources include among others:

1.    Land  and  Right to collect land revenue (ownership of all land rests with the nation)

2.    Mountains, (the  Himalayas, the planet's highest mountains), Hills and Valleys

3.    Forests spread over a massive 23% land area ad measuring about 7 lac sq kms generating huge income from its products.

4.    Deserts having vast store of oil and gas, sun light, wind

5.    Sea coasts and millions of sq kms of sea bed having store of oil, gas and many more minerals

6.    Countrywide network of Rivers, Lakes, Dams, Canals – water, navigation

7.    Enormous reserve of 89 kinds of Minerals including Oil and Gas Reserves

8.    Different kinds of Airwaves 2G, 3G, 4G, 5G etc.

9.    Hospitals and medical Services

10.  Educational Institutions

11.  Railways.

12.  Roads and power to grant transport rights, levy toll tax, etc.

13.  Airways and power to grant flying rights, Airports,

14.  Waterways, Docks, power to grant shipping  rights

15.  Real estate owned by various Government establishments – Land, Buildings, warehouses, Hotels, resorts, etc.

16.  Public Sector Undertakings of huge value like ONGC, SAIL, Banks, etc.

17.  Development Rights, Business Rights, Manufacturing Rights, Authority to sell FSI, Lease rights, etc.

18.  Power Generation Plants, Transmission Lines and Distribution Network, etc.

19.  Armed Forces - Land, Air force and Navy and their costly weapons and ammunitions

20.  Space and other Research organizations

21.  Manufacturing units in private sector

22.  Trading and commerce

23.  Professional Services

24.  Financial Assets

25.  Inventories, etc

The list is only indicative and not exhaustive.

All these assets and resources have immense economic value. At the same time to create these assets monetary liabilities are undertaken both in Public and Private Domain. It is equally important to monitor our liabilities and keep them in manageable limits.

The Methodology developed by us shall monetize all assets and resources of the country and shall also keep an account of Liabilities undertaken. Knowledge of monetary value of national Assets and Resources shall open flood gates for their better utilization and optimization of their economic value. This shall be an important step in enrichment of peoples’ lives.

Accounting of National Assets

National Assets

A system of national accounts, like a system of business accounts, has two main components. The first is a statement of flows of economic objects (commodities, services, money, and other financial assets) during a period of time, usually a year. The second is a statement of the stocks of economic objects, physical and financial, existing at a point in time. These stocks are recorded in the national balance sheet and in the balance sheets of less comprehensive groups. The groups may be broad sectors, such as all households, all business enterprises, or all government organizations within a nation; or smaller subsectors, such as households of a given type or individual industries.

The consolidated balance sheet cancels creditor–debtor and holder–issuer relationships among units both of which belong to the group or sector. In the consolidated balance sheet of the American banking system, for instance, the deposits that commercial banks keep with Federal Reserve banks or with other commercial banks disappear. Similarly, in a national balance sheet all claims of one national against another and all holdings by a national of equity in domestic business enterprises are eliminated. Hence, in a national balance sheet the only assets that remain are tangible assets and net claims against foreigners.

National wealth thus is equal to the sum of domestic tangible assets and the net foreign balance. The net worth that appears opposite national wealth and with the same amount is necessarily equal to the combined (or the consolidated) net worth of all ultimate domestic units, that is, of households and governments. Similarly, the wealth of a sector or of a single economic unit is equal to the sum of its tangible assets and its net “foreign” balance, the latter referring to all its claims against and all its liabilities to other sectors or units (including equity securities). The wealth of a sector or unit thus equals the sum of its tangible and financial assets less its liabilities. This difference is called its net worth.

For some purposes, particularly the study of financial structure and development, what is needed is not the consolidated but the combined balance sheets of groups, sectors, or nations. In these balance sheets the sum of tangible and financial assets is equal to the sum of liabilities and net worth, no distinction being made between intragroup and intergroup claims, liabilities, and equities. The footing of a combined national balance sheet may be called national assets.

Source and courtesy:https://www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/national-wealth

The scope of national wealth

According to the basic definition of national wealth, it consists of the assets remaining in the consolidation of the balance sheets of all economic units within the national boundaries. The concept therefore includes non-reproducible tangible assets, such as land and subsoil assets; reproducible fixed and movable tangible assets, such as buildings and other structures, machinery and equipment, vehicles, and consumer durables; inventories of monetary metals, raw materials, work in process and finished goods; and the excess of foreign assets over foreigners’ holdings of domestic claims, equities, and tangible assets. There remain  few problems of whether to include or omit specific types of assets which are listed below. The decision will usually rest on the uses to be made of the estimates and the availability and reliability of data.

(1) Military assets. There is no reason to omit these if a comprehensive picture of national wealth is wanted, but they should be separated from nonmilitary assets for purposes of analysis.

(2) Works of art and collectors’ items. In principle these should be included at market value, which is fairly well defined for several assets of this type. In practice they are usually omitted because of lack of information on a sufficiently comprehensive basis.

(3) Natural resources. These are excluded insofar as they cannot be separately appropriated or sold, as is the case with sunshine and precipitation. Otherwise they are included, directly or indirectly, as part of the market value of land.

(4) Human resources. Human resources are a very important and valuable national asset. A country is as rich as its human resources are educated and skilled. Many Muslim countries are lacking progress in absence of proper and scientific education to its people. 

Disclaimer: The article has been compiled for the purpose of providing general knowledge only.  Viewers should make further research on the subject for taking any decision which can have consequences.  This information has been collected through secondary research and publisher is not responsible for any errors in the same

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