A country's Gross Domestic Product (GDP) for a year is ₹60,00,000 crore. During the year, the estimated monetary value of natural resource depletion (forests and minerals drawn down) is ₹4,00,000 crore, and the estimated cost of environmental degradation (air and water pollution

Question

A country's Gross Domestic Product (GDP) for a year is ₹60,00,000 crore. During the year, the estimated monetary value of natural resource depletion (forests and minerals drawn down) is ₹4,00,000 crore, and the estimated cost of environmental degradation (air and water pollution damage) is ₹2,50,000 crore. Calculate (i) the Green GDP, and (ii) environmental costs as a percentage of GDP.

Accepted Answer

**Step 1 — Apply the Green GDP formula.**

$	ext{Green GDP} = 	ext{GDP} - 	ext{Value of Resource Depletion} - 	ext{Cost of Environmental Degradation}$

$= 60{,}00{,}000 - 4{,}00{,}000 - 2{,}50{,}000 = ₹53{,}50{,}000 	ext{ crore}$

**Step 2 — Compute environmental costs as a percentage of GDP.**

Total environmental cost $= 4{,}00{,}000 + 2{,}50{,}000 = ₹6{,}50{,}000$ crore.

$	ext{Percentage} = \dfrac{6{,}50{,}000}{60{,}00{,}000} 	imes 100 = 10.833\ldots\% \approx 10.83\%$

**Independent check.** Green GDP as a fraction of GDP should equal $100\% - 10.83\% = 89.17\%$ of GDP. Checking: $53{,}50{,}000 / 60{,}00{,}000 	imes 100 = 89.17\%$ — consistent with the deduction computed above, confirming the arithmetic.

> [!ANSWER]
> Green GDP = ₹53,50,000 crore. Environmental (resource depletion + degradation) costs are approximately 10.83% of conventional GDP.

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