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DAILY NEWS ANALYSIS
15 January, 2024
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Recently, the 1st Advance Estimates (FAEs) released by the government showed that India’s GDP will grow by 7.3% in the current financial year (2023-24), slightly faster than the 7.2% growth in 2022-23.
What is GDP?
Gross Domestic Product – GDP is defined as total market value of all final goods and services in an economy.
Nominal GDP – It is the value of GDP at the current prevailing prices.
Real GDP – It is the value of GDP at some constant set of prices which is calculated by removing the effects of price inflation from the nominal GDP by using a GDP or price deflator.
GDP deflator – It is the ratio of nominal to real GDP which gives us an idea of how the prices have moved from the base year to the current year.
Base Year is the year whose prices are being used to calculate the real GDP. In 2015, India’s Central Statistics Office (CSO) introduced a new series which revised the base year from 2004-05 to 2011-12.
Parameter |
GDP |
GVA |
Name |
Gross Domestic Product |
Gross Value Added |
|
It is the market values of all final goods and services produced within the territorial boundaries of a country in a given period. |
It is total value of goods and services produced within a country after deducting the costs of raw materials and inputs. |
Measurement |
Output, Income and Expenditure approaches. |
By output reach and used as a proxy for GDP. |
|
It is internationally expected measure of overall economic growth of the country. |
It is used to measure sector-wise details of economic activity from production side. |
Gross National Product (GNP) takes into account the value of economic activities of those who are not residents of the country as well.
GNP = GDP + Net Income Property from abroad
What is contributing to India’s growth?
GDP is calculated by 3 different methods.
4 main engines of GDP growth – On basis of demand side.
What are Advance Estimates of National Income?
Union Budget is presented on February 1 every financial year. In the year of Lok Sabha elections like in 2024, a full-fledged Union Budget will not be presented.
Findings of FEA – By the end of March 2024, India’s GDP is expected to rise to almost Rs 172 lakh crore and on an annual basis, the growth rate estimated for 2023-24 is 7.3%.
2nd Advance Estimates – It is released by the end of February every year.
Provisional Estimates – It is released by the end of May.
Revised Estimates – The GDP estimates continue to be revised and in the coming 3 years, the 1st, 2nd, and 3rd Revised Estimates of this year’s GDP will be released.
Actuals – It is the final number of GDP.
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