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The objective of the study is to address the issues of environmental accounting for oil and gas resources in India and particularly for the states of Assam and Gujarat. It incorporates the value of depletion and degradation into the national accounts. It also examines the direct emission of CO2, SO2 and NO2 from the fossil fuel combustion using input-output tables of 2003-04 and 2006-07 of the Indian economy. In this study the national and state level accounts are adjusted by compiling physical and monetary accounts for oil and gas resources and these accounts are then incorporated in the system of national accounts in India, by using the net price method, user cost method and net present value method. The results of the study indicate that the growth rate of Adjusted NNP based on user cost ranged from 6.61% in 1999 to 9.43% in 2007.