Product (GDP)

Product (GDP) Produced in the country: GDP of India includes only the market value of goods and services produced in India. For example, the market value of apples produced in Kashmir are included in our GDP since Kashmir is in India. The market value of apples produced in California, even if they are sold in Indian markets, they are not included in our GDP, because California is in the U.S. Produced during a time period The GDP of a country measures the market value of goods and services produced only during the specified time period. The goods and services produced in earlier periods are not included. The modern concept of GDP was first developed by Simon Kuznets for a US Congress report in . Methods of GDP Calculating . Expenditure Approach: In this method, the GDP is measured by adding the expenditure on all the final goods and services produced in the country during a specified period. Y = C + I + G + (X − M) . The Income Approach: This method looks at GDP from the perspective of the earnings of the men and women who are involved in producing the goods and services. The income approach to measuring GDP (Y) is Y = wages + rent + interest + profit . Value-Added Approach: A cup of tea served to you in a hotel is a “final good”. The goods used to produce it are tea powder, milk, and sugar, are “intermediate goods” since they form a part of the final good, the cup of tea. One way to measure the market value of the cup of tea is to add the value produced by each intermediate good used to produce it. The sum of the value added by all the intermediate goods used in production equals to the total value of the final goods produced in the economy. - - . . AM - - . . AM Gross Domestic Product and its Growth: an Introduction . The GDP does not tell us about the kind of life people are living: A high level of per capita real GDP can go hand-in-hand with very low health condition of people, an undemocratic political system, high pollution and suicide rate. Estimation of GDP The Central Statistical Organisation (CSO), under the Ministry of Statistical department keeps the records. Its processes involves conducting an annual survey of industries and compilation of various indexes like the Index of Industrial Production (IIP) Consumer Price Index (CPI) etc.