Economics Prelims cum Mains

Centre to start measuring ‘green GDP’ of States

The News

  • To quantify India’s environmental diversity and riches, Central government has decided to calculate every state’s ‘green’ Gross Domestic Product (GDP).


What is GDP?

  • The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country’s economy.
  • It represents the total value of all goods and services produced over a specific time period, often referred to as the size of the economy.


What is Green GDP?

  • The green GDP is the measurement of GDP growth with the environmental consequences of that growth factored in. Simply, it is used to express GDP after adjusting for environmental damage.
  • It is a measure of how a country is prepared for sustainable economic development.
  • Thus, Green GDP is expected to account for the use of natural resources as well as the costs involved. This includes medical costs generated from air and water pollution, loss of livelihood due to environmental crisis such as floods or droughts etc.



Need of calculating Green GDP

  • According to recent World Bank report, it cost about $550 billion to India amounting about 8.5% of its GDP, due to air pollution ; the cost of externalities such as water pollution and land degradation were possibly far higher
  • The ignorance of environment in pursuit of advancing economic development is raising the risk of desertification and land degradation significantly. Therefore some estimates shows that our food production could see a loss of 10-40% if these trends continue unabated.
  • Thus rather than focusing only on GDP, it’s high time to start working upon Green GDP.
  • Green GDP will help with a range of policy decisions, such as compensation to be paid during land acquisition, calculation of funds required for climate mitigation, and so on.


About the project

  • Initially the pilot project will be started in 54 districts of different states of the country.
  • Land will be demarcated into “grids” with about 15-20 grids per district.
  • These will capture the diversity in the State’s geography, farmland, wildlife, and emissions pattern, and these data will be used to compute a value.
  • Much of the data required for the inventory would be sourced from datasets that already exist with other government ministries.


Steps undertaken in the past

  • In 2009, the Centre announced that it would publish a “green GDP” that would include the environmental costs of degrading and depleting our forests, grasslands and natural stock.
  • An expert programme, sponsored by the Ministry of Statistics and Programme Implementation, released a Compendium of Environment Statistics 2013 .
  • The group recommended that India shift to a system of measuring comprehensive national wealth, which includes items such as human capital, capital equipment and natural capital.
  • However, implementation of recommendations has been constrained by the lack of micro-level data on capital formation, particularly in a natural context.
  • The 12th Five Year Plan undertook groundwater resource mapping at the national level, which was indeed a significant exercise
  • Similar comprehensive exercises are now essential for data on land usage, forests and mineral wealth.

Note- This is the first time such a national environment survey is being undertaken.


Other significant step taken: Green Skilling Programme

  • The government has also launched a ‘green skilling’ programme.
  • Under this programme, school dropouts youths would be trained in a range of ‘green jobs’
  • Green Jobs include operators of scientific instruments used to measure environmental quality, as field staff in nature parks, and as tourist guides.
  • Some of the labour required for the survey would also be sourced from the green-skilled workforce.

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