Outlook Business Desk
India's GDP grew at 5.4% during the July-September 2024 quarter, marking the slowest pace in the past seven quarters and falling short of the expected 6.5% consensus. In response, Chief Economic Advisor V Anantha Nageswaran acknowledged the disappointing figures but reaffirmed that the overall growth projection for FY25 remains at 6.5%.
Gross Domestic Product (GDP) is the total value of all goods and services produced within a country’s borders during a specific period. It serves as a measure of a nation's economic performance and is used to compare the economic strength of different countries
GDP reflects the size, growth rate, and overall health of an economy, providing valuable information for policymakers and investors to make informed decisions and evaluate the effectiveness of initiatives such as “Make in India”
Nominal GDP is calculated using current prices without adjusting for inflation. In contrast, Real GDP is adjusted for inflation, offering a more accurate picture of economic growth by eliminating the impact of price fluctuations. GDP per capita is determined by dividing the total GDP by the population, which provides valuable insights into average income levels and the standard of living within a country
The Production Method calculates GDP by adding the value produced at each stage of production, focusing on different industries and sectors. The Expenditure Method totals expenditures across key categories—private consumption, investments, government spending, and net exports. Meanwhile, the Income Method sums all incomes earned within the economy, including wages, rents, profits, and other forms of earnings
In India, the Ministry of Statistics and Programme Implementation (MoSPI) is responsible for calculating GDP. To ensure accuracy, both the production and expenditure methods are employed, with data gathered from industrial surveys, agricultural output, and financial reports
GDP has several limitations. It does not reveal how wealth is distributed among citizens. Additionally, it may not fully capture significant informal economic activity. GDP also overlooks the environmental costs linked to economic growth. Moreover, it excludes non-monetary transactions, like unpaid household chores or volunteer work