Warning that environmental degradation could have serious consequences, Prime Minister Manmohan Singh on Friday emphasised that economic growth should be based on optimal use of natural resources and development must be environmentally sustainable.

Often, he regretted, "economic policies designed to promote growth have been implemented without considering their full environmental consequences, presumably on the assumption that these consequences would either take care of themselves or could be dealt with separately".

Singh said this while inaugurating the International Workshop on Green National Accounting for India here.

He said India's commitment to planned economic development reflects the government's determination to improve the economic conditions of people and an affirmation of the role of the government in bringing about this outcome through a variety of social, economic, and institutional initiatives.

"But as the economy develops the capacity to grow rapidly, it gives rise to many new challenges. For instance, natural resources are limited, and final.

"And one needs to decide how to use these scarce resources optimally, both from the economic development and the sustainability perspectives," Singh said.

The Prime Minister said there is evidence to suggest that such policies may actually result in a net decrease in human well-being.

Globally, he said, environmental degradation is manifesting itself through the loss of fertile soils, desertification, decreasing forest cover, reduction of fresh water availability, and an extreme loss of bio-diversity.

"These are serious consequences, and it has become clear today that economic development must be environmentally sustainable," he added.

Singh said through planned economic development, India aims to attain economic growth and poverty alleviation, and doing so in a sustainable manner.