Depreciation of Capital due to Natural Disaster and Adjusted Net Domestic Product

Abstract

<p>This paper tries to account for the economic loss due to natural disasters, as the depreciation of capital and provide the adjusted estimate of NDP. Systematic data on economic loss due to natural disasters are limited for all Indian states. Therefore, this paper provides a methodological framework for accounting for the depreciation of the capital due to natural disasters for all Indian states and provides an approximate estimate of adjusted NDP for all Indian states. Due to availability of systematic data on the economic loss due to natural disasters, time series estimate of adjusted NDP are provided for Odisha state which experiences maximum climatic natural disasters. Calculation of adjusted NDP will be very much useful for fiscal transfer from Union to States and other economic policy making. </p>