How is the Indian GDP Calculated?: The GDP is the most important criterion for measuring the economic health of any country. GDP is the total value of production of goods and services during a particular period. GDP is calculated on every third month i.e. on a quarterly basis in India. The notable point is that these productions or services should be associated the country. Basically, India has three major components Agriculture, Industry, and Services, whose basis Indian GDP rates have calculated as the average of the increase or decrease in production.
GDP is presented in two ways. Because the cost of production decreases with inflation, this scale is Constant Price. Under this, the rate of production and production of GDP is fixed at the cost of production in a base year.
For instance, if the base year is 2015, then the price of production is seen as a rise or fall. The other way which is used to introduce the GDP is the current price. Under this, the production price and Inflation rates are being checked.
Central Statistical Office(CSO) fixes a base year. The evaluation of CSO on production and services is being joined. In this base year, the prices of Production and Services viewed by making the basis of prices and accordingly, the comparative increase or fall is assessed.
Based on the cost price, GDP is calculated so that it can be measured by keeping the data separate from the fluctuations in inflation.
India GDP Analysis
India’s Constant Price calculation base year is currently 2011-12. For instance, If only three items of worth rupees 100 Rs per were made in India in 2011, then India’s total GDP was Rs 300. And if by 2017 the production of this item was two, but the price was 150 rupees then the nominal GDP was 300 rupees. But what actually happened, did India progress? No
This is the time where the base year formula works. According to the 2011
costantprice (100 Rupees), the actual GDP was 200 rupees. Now it can be clearly seen that GDP has declined.
CSO Full Form and What its role in GDP?
CSO collects production and services data across the country. In this process, there are several indices, mainly in the industrial production index ie IIP and Consumer Price Index (CPI).
CSO collects data by coordinating with various central and state agencies. For instance, the wholesale price index i.e. WPI and consumer price index i.e. manufacturing for calculating CPI, data of agricultural product mobilizes the consumer affairs ministry. Similarly, the figures of IIP raise the Department under the Ministry of Commerce and Industry.
CSO collects all these data and then calculates the GDP data by computing it.
The figures are mainly collected from eight different industrial areas. These are-
- Agriculture, forestry, and fishing
- Mining and quarrying
- Electricity, gas and water supply
- Trade, hotels, transport, and communication
- Financing, insurance, Real Estate, and business services
- Community, social and personal services
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