Today we use the conventional macroeconomic indicators of GDP to understanding the overall economic position of a country, but GDP does not properly account for social and environmental cost and benefit. It is also difficult to achieve sustainable decision-making. If welfare is being considered from a purely financial point of view, sustainable development can be defined as “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. It is, therefore, it requires a clear and at the same time multidimensional indicators showing the link between a community’s economy, environment and society. The Green Economy is a new approach arising from summit in Rio de Janeiro, 2012 (Rio+20) to celebrate the 20th anniversary of the first Rio Earth Summit in 1992. The UNEP defines a green economy as one that results in “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. In its simplest expression, a green economy is low carbon, resource efficient and socially inclusive economy. In a green economy, growth in income and employment should be driven by public and private investments, that reduce carbon emissions and pollution, enhance energy and resource efficiency and prevent the loss of biodiversity and ecosystem services. The green economy approach is an effort to focus sustainable development and poverty reduction effort on transforming economic activities and economies. Important components of this approach include the use of economic instruments, that creation of an investment- friendly environment and directing public and private investment towards building natural capital stocks. Green economy could be an overarching goal for both developed and developing countries in making future development more sustainable. While the concern of the industrialized economies is how to reduce environmental risks and keep the economy green. The concern of the developing economies is now growth can be promoted without degrading the natural resource base and with respect for the principles of low-carbon economy. For the mountain regions, particularly those are the developing economies where millions of people live in a fragile environment and depend mainly on natural resources for their living. The challenge is how to sustainably manage the ecosystems strengthens resilience to climate change and economic pressures and promote low-carbon based economic growth and social justice. India can make green growth a reality by putting in place strategies to reduce environmental degradation at the minimal cost of 0.02% to 0.04% average annual GDP growth rate. According to a New World Bank Report, 2013, this will allow India to maintain a high pace of economic growth without jeopardizing the future environmental sustainability. The annual cost of environmental degradation in India, amounts to about Rs. 3.75 trillion ($ 80 billion) equivalent to 5.7% of GDP. It focuses on particle pollution from the burning of fossil fuels, which has serious health consequences amounting to up to 3% of India’s GDP along with losses due to lack of access to clean water supply, sanitation and hygiene and natural resource depletion. Of this, the impacts of outdoor air pollution account for the highest share at 1.7% followed by cost of indoor air pollution at 1.3%. The higher costs for outdoor/indoor air pollution are primarily driven by an elevated exposure of the young and productive urban population to particulate matter pollution that results in a substantial cardiopulmonary and chronic obstructive pulmonary disease mortality load among adults. Further, a significant portion of diseases caused by poor water supply, sanitation and hygiene is borne by children under 5. Above 23% of child mortality in the country could be attributed to environmental degradation. Also, according to the World Bank Report, 2013 “Diagnostic Assessment of select Environmental Challenges in India” is green growth, affordable in India, 10 % particulate emission reduction by 2030 will lower GDP modestly, representing a loss of merely 0.3% to the GDP compared to business as usual, on the other hand, a 30% particulate emission reduction lowers GDP about $ 97 billion, or 0.7% with very little impact on the growth rate. There are significant health benefits, the savings from reduced health damage range from $ 105 billion in the 30% case to $ 24 billion with a 10% reduction. This, to a large extent, compensates for the projected GDP loss. The report also emphasized that green growth is measurable and important as India is a hotspot of unique biodiversity and ecosystems. The study undertook a first ever comprehensive assessment of the value of ecosystem services from various biomes across India. Based on conservative estimates, it amounts to about 3.0% to 5.0% of GDP. Conventional measures of growth do not adequately capture the environmental cost, which have been found to be particularly severe at the current rapid growth rate. In this backdrop, it is essential to evaluate the state of the green economy. Therefore, the present study tries to examine the state of the green economy with reference to India through empirical analysis and a comparative study with reference to selected developed and developing countries, using appropriate indicators of green economy for the latest study period.