Gross Domestic Product (GDP) - Indian Economy

Gross Domestic Product (GDP) 

Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during one year period. For India, this calendar year is from 1st April to 31st March.

It is also calculated by adding;

• national private consumption
• gross investment 
• government spending
• trade balance (export-minus-import)
• 
  

The use of the exports-minus-imports factor removes expenditures on imports not produced in the nation and adds expenditures on goods and services produced which are exported but not sold within the country.

The different uses of the concept of GDP are given below:

• Per annum percentage change in it is the 'growth rate' of an economy. For example, if a country has a GDP of Rs.107 which is 7 rupees higher than the last year, it has a growth rate of 7%. When we use the term ' a growing ' economy, it means that the economy is adding up its income.

• It is a 'quantitative report' and its volume and size indicate the economy's internal strength. But it does not say anything about the 'quantitative' aspects of the goods and services produced.

• This is the most commonly used data in comparative economics. The GDPs of the member nations are ranked by the IMF at purchasing power parity (PPP). India's GDP is today 3rd largest in the world at PPP (after China and the USA). While at the prevailing exchange rate of Rupee (into the US dollars) India's GDP is ranked 6th largest in the world.

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