The present study was an attempt to quantify the direct as well as indirect ecosystem services from forest ecosystems in the Melghat area, which were undervalued in economic terms as compared to other developmental projects. The valuation of growing stock in the Melghat Tiger Reserve (MTR) was estimated to be IRs 80221 crores (equal to 9600 million US $). While the carbon sequestration potential of the system was estimated to be IRs 9291 crores, the value of non-timber forest products (NTFP), a part of the provisioning service, was IRs 3.92 crore. The Forest land itself is valued at IRs 66874 crores using the current land costs in the region for non-forest uses. Recreation benefits are estimated to be IRs 30.94 crores which is more than the user fee collections at entry points. The contribution value of biodiversity and other ecosystem services for the entire Melghat landscape was IRs 2156 crore. Timber and carbon sequestration loss due to land distributed under forest rights was IRs 447.23 crore, while gains from agricultural use of that land by farmers was merely IRs 7.07 crore. Thus, the land conversion resulted in 63 times higher loss in the total ecosystem services than the gains from the subsistence-level farming practice for provisioning service alone. The total economic value of the Melghat landscape was estimated at IRs 1,69,853 crore, equalling to IRs 57.20 lakh per ha. The Net Present Value (NPV) of IRs 7.5 lakh per ha for protected areas such as the MTR prescribed by the Ministry of Environment, Forests and Climate Change, Government of India is much lower than the estimated value, emphasizing the need to revise NPV using appropriate valuation methodology.
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