Union Budget 2019: GDP is the primary indicator used to gauge the health of a country's economy
The GDP measures the value of economic activity within a country.
Each country prepares and publishes its own GDP data regularly
The govt had revised down its estimate for FY 2018/2019 growth to 7% from 7.2% earlier projected
The country's economy advanced 5.8 percent year-on-year in the first quarter of 2019
The Gross Domestic Product (GDP) is one of the primary indicators that is used to gauge the health of a country's economy. It represents the total rupee value of all goods and services produced over a specific time period, often referred to as the size of the economy.
The GDP measures the value of economic activity within a country. Strictly defined, the GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time.
GDP is defined using this formula: GDP = Consumption + Investment + Government Spending + Net Exports or more succinctly as GDP = C + I + G + NX.
Here, consumption (C) represents private-consumption expenditures by households and non-profit organisations, investment (I) refers to business expenditures by businesses and home purchases by households while government spending (G) denotes expenditures on goods and services by the government, and net exports (NX) represents a nation’s exports minus its imports.
Each country prepares and publishes its own GDP data regularly. In addition, international organisations such as the World Bank and the International Monetary Fund (IMF) periodically publish and maintain historical GDP data for many countries.
India's GDP in FY 2018
India is the world's seventh-largest economy measured by nominal GDP (Gross Domestic Product) and the largest by PPP (purchasing power parity).
The government had revised down its estimate for FY 2018/2019 (April 2018 to March 2019) growth to 7 percent from 7.2 percent earlier projected. The Indian economy advanced 7.1 percent year-on-year in the third quarter of 2018, well below 8.2 percent in the previous period and market expectations of 7.4 percent.
Growth rate slows in Q1 of 2019
The country's economy advanced 5.8 percent year-on-year in the first quarter of 2019, slowing from a 6.6 percent expansion in the previous period and missing market expectations of 6.3 percent. It was the weakest growth rate since the first quarter of 2014, amid weaker consumer demand and fixed investment.
GDP annual growth rate in India averaged 6.21 percent from 1951 until 2019, reaching an all-time high of 11.40 percent in the first quarter of 2010 and a record low of -5.20 percent in the fourth quarter of 1979.
India has one of the fastest growing service sectors with an annual growth rate above 9 percent since 2001, which contributed to 57 percent of the GDP in 2012–13. India has become a major exporter of IT services, Business Process Outsourcing (BPO) services, and software services with $177 billion revenue in FY 2019.
According to figures released by the Ministry of Statistics and Programme Implementation for the period 2014-2015, the three states of Maharashtra, Tamil Nadu, and Utter Pradesh were leading in GDP.
The National Statistical Office, the official agency of the government, on 31 August, had said the real GDP growth for the first quarter of 2021-22 was at 20.1 percent.
Gita Gopinath, chief economist of the IMF, said that compared to their July forecast, the global growth projection for 2021 has been revised down marginally
Malpass also said that India, which faces huge challenges of integrating more people into the formal sector economy and raising the earnings of the people, has made some progress but that's not enough.