Last year, violence cost Indian economy Rs80 lakh crore - 9% of its GDP
In terms of purchasing power parity, it cost the global economy USD 14.76 million
A study conducted by the Institute for Economics and Peace (IEP) across 163 countries and territories reported that violence cost India over Rs80 lakh crore (USD 1.19 trillion) in the year 2017 in constant purchasing power parity (PPP). This means almost Rs40,000 (USD 555.4) per person, which is a total of 9% of the India's gross domestic product (GDP).
With regards to PPP, violence cost the global economy USD 14.76 trillion in 2017, which is 12.4 per cent of GDP, or USD 1,988 per person.
So, what is the definition and criteria of calculating global economic impact by violence? To begin with, the study defines it as the expenditure and financial effect towards "containing, preventing and dealing with the consequences of violence". It also takes into account direct and indirect cost, and economic multipliers. "The multiplier effect calculates the additional economic activity that would have accrued if the direct costs of violence had been avoided," the report noted.
Violence however is different from conflict - the latter we face on a daily basis at work or schools or even homes but conflict doesn't always devolve into violence. Violence can have many triggers but on a global scale, it is usually because of terrorism, conflicts in Middle-East, Eastern Europe, Northeast Asia, refugee crisis to name a few.
"The total economic impact of violence (globally) was higher in 2017 than at any point in the last decade," the report pointed out. It also said that global economic impact increased by 2.1% from 2016 to 2017, main reason being rising internal security expenditure.
The report is also telling regarding the positive impact less violence has on a country's economic prosperity. Since 1960, countries which have faced lesser violence have seen an average per capita GDP growth of 2.8% annually. However, the ones at constant violence have barely managed a growth of 1%.