UGC NET Questions (Paper – 1)

Green accounting attempts to integrate environmental factors into national income accounts. It recognises that GDP can rise while natural capital is depleted or environmental quality declines, giving a misleading picture of true wealth. By subtracting costs of pollution and resource depletion and adding the value of environmental services, green GDP provides a more realistic measure of sustainable economic performance. Thus, the main idea is to adjust income measures for environmental losses, as described in Option C.

Option A:
Option A is incorrect because simply calculating physical output volumes does not address environmental externalities. Green accounting is specifically concerned with valuing environmental gains and losses.

Option B:
Option B is incorrect as it suggests excluding environmental assets, which is the opposite of what green accounting advocates. Ignoring these assets perpetuates the shortcomings of conventional GDP.

Option C:
Option C is correct since it points to the need for incorporating the depreciation of natural capital alongside produced capital. This adjustment helps policymakers see whether growth is being achieved at the cost of long-term environmental health.

Option D:
Option D is incorrect because green accounting does not demand the abolition of all traditional measures. Instead, it complements and refines them by adding an environmental dimension.

Statements A, B and C are in fact correct as they describe how environmental accounting and green GDP attempt to incorporate environmental factors into economic assessment. Traditional GDP does ignore many environmental costs, and green GDP seeks to correct for these. Statement D is incorrect because environmental accounting provides important information for policy and planning. Since option C includes B, C and D and leaves out A while accepting D, it cannot be the correct answer. The correct combination must include A, B and C only.

Option A:
Option A is correct because it lists A, B and C and excludes D. It highlights the conceptual and practical significance of environmental accounting and green GDP in making development assessments more environmentally informed. Thus, it matches the intent of the question.

Option B:
Option B is incorrect because it omits C, which explicitly refers to green GDP adjustments, an important part of the concept. Leaving out such a central statement makes the combination incomplete.

Option C:
Option C is incorrect as it includes D, which wrongly asserts that environmental accounting is irrelevant for decision making. This contradicts the rationale behind developing such accounting systems.

Option D:
Option D is incorrect because it pairs A and C with D and omits B. It again accepts D, the incorrect statement, and fails to acknowledge the limitations of traditional GDP captured in B.

Green GDP is an attempt to modify traditional GDP by subtracting the monetary value of environmental damage and resource depletion. It reflects the idea that economic output achieved by degrading natural capital is not fully beneficial. By integrating environmental costs,it provides a more realistic picture of sustainable income. Therefore the description in the question corresponds to green GDP.

Option A:
Green GDP incorporates estimates of pollution damage,deforestation and other forms of ecological loss into national accounts. This helps policymakers see whether growth is achieved at the expense of future productive capacity. Because the stem emphasises adjusting GDP for environmental degradation,this term is the correct answer.

Option B:
Net national product adjusts gross measures for depreciation of physical capital but not necessarily for environmental depletion. It focuses on man made capital rather than ecosystems. Hence it does not fully capture the idea described in the question.

Option C:
Per capita income divides national income by population to indicate average income. It says nothing about environmental impacts or sustainability. Therefore it is not appropriate for the definition given.

Option D:
Balance of payments records a country’s financial transactions with the rest of the world. It deals with trade,investment and transfers,not with ecological accounting. Thus it does not match the concept described in the stem.