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Gross domestic product(GDP)

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    30th Mar, 2022

Context

India`s GDP rose significantly in the second quarter of the fiscal year 2021-22 growing at 8.4 percent.

What is GDP?

  • GDP marks overall production within the boundary of the country and shows the growth of the country by covering the production growth of almost every sector.
  • It is defined as the total monetary or market value of all finished or final goods and services produced within a country at a given time.
  • It provides deeper insights into the inflation level of the country.
  • It can be calculated on basis of the Income method, expenditure method, and production method.
  • Based on calculation it is classified into two types such as;
  • Nominal GDP- GDP at market price is termed as nominal GDP calculated as per the market price for the year. It is not been adjusted for inflation.
  • Real GDP- GDP calculated at base year price referred to as real GDP, adjusted for inflation to reflect changes in real output. The current base year price for GDP is 2011-12.
  • GDP at factor cost = GDP at market price - net indirect taxes. It shows the total production growth of the country.

GDP v/s GVA

Gross value added(GVA) is the total value of all goods and services produced  in an economy within the boundary of the country It is being calculated as 

GVA  =  GDP at market price + Product subsidies - Taxes on product

 

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