What is Gross Domestic Product?

“Gross Domestic Product” is nothing but the monetary value of all the officially recognized finished goods and services produced within a country in a year or a specific time period.
It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.
“Gross Domestic Product” is not to be mistaken for “Gross National Income”

Gross Domestic Product can be bifurcated into Real GDP and Nominal GDP. The difference between Nominal GDP and Real GDP is used to measure inflation in a statistic called The GDP Deflator.

India had anticipated a GDP growth of 5.7% in 2015, which clearly makes it a host destination investors and business seeking industrialist of the world. The medium of “Communication Technology” has been used to develop a country’s socio-economic situation. “Communication Technology” has proved to be indeed a vital tools to smoothen to process to International Development and Human Rights awareness. Through this medium one seeks to understand the problems faced by the community, educational standards and basic infrastructure to support strategic occupations.

What does it indicate?

• GDP per capita is an indicator of a country’s material standard of living.
• Gross domestic product attempts to pinpoint the country’s economic health in just one number and when a country is health unemployment is low and wages increase.

What does it represent?

• Apart from representing the economic health of the country it also presents a sum of a country’s production which consists of all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies.

GDP Calculation

• The GDP of a country can be calculated in the below mentioned rates
  • Expenditure approach,
  • Income approach
  • Value-added approach

Importance of GDP

• Gross Domestic Production carries a lot of significance as it gives an overall picture of the economic state of the nation
• GDP enables policymakers and central banks to judge:
  • The economy contraction/expansion
  • Need of a boost/restraint
  • Threat of recession/ inflation
  • “Gross Domestic Product” helps policymakers, economists and businessmen to analyze the monetary and fiscal policy, economic shocks, tax and spending plans
    • Investors look at the GDP growth rate to see if the economy is changing rapidly so they can adjust their asset allocation. In addition, investors compare country GDP growth rates to decide where the best opportunities are.
    • GDP report helps us to understand which sectors of the economy are growing and which are declining.

India’s GDP trend

• GDP at factor cost at current prices in the year 2013-14 is estimated at `104.73 lakh crore, showing a growth rate of 11.5 percent over the First Revised Estimates of GDP for the year 2012-13 of ` 93.89 lakh crore, released on 31th January 2014.
• India’s GDP when calculated in 2012 came to 1.842 trillion USD

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