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Green GDP to estimate depletion by \| 22-06-2011 14:13
A growth rate of 8.4% may not be indicative of a robust and healthy economy after all. With rapid degradation and depletion of the country¿s natural resources, India is incurring huge losses, unaccounted for in the gross domestic product (GDP). In a move to estimate the correct GDP, the ministry of statistics and programme implementation is working on estimating the total cost of depletion of natural resources by way of natural resource accounting (NRA). Though there are no immediate plans to calculate GDP adjusted to such natural losses as it involves serious complications, we have started on natural resource accounting by conducting workshops in academic institutions like the Indian Institute of Forest Management, Bhopal,¿ SK Nath, director general, Central Statistical Organisation, told FE. Elaborating on the concept, he said, NRA made it possible for statisticians to measure the value of loss of natural assets of a country, including water resources, forest reserves and air quality. We have asked various academic institutions to conduct studies and are expecting the papers to come in shortly, he said. The data thus compiled will help in estimating the loss due to the irreversible damage done in the process of economic development. The concepts of NRA and adjusted GDP (green GDP) have for long been debated by economists. This has been mainly due to lack of consensus on how natural resources should be valued. But with traditional indicators of growth like GDP and NNP being increasingly considered inadequate, these concepts are gaining acceptance. According to experts, GDP calculated the traditional way takes into account depreciation of man-made assets, while depreciation of environmental assets goes unaccounted for. Depletion of natural resources is actually treated as an increase in income, when it could be potentially disastrous for future growth. Also, accounting for degradation costs could result in a much lower GDP, which is the reason why many developed nations are reluctant in adopting the green GDP. Source: http://www.financialexpress.com/news/green-gdp-to-estimate-depletion/164399/3

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