Gross Domestic Product

What is GDP?• Gross domestic product (GDP) is a

monetary measure of the value of all final goods and services produced in a period (quarterly or yearly).• Nominal GDP estimates are commonly used

to determine the economic performance of a whole country or region, and to make international comparisons.

Components of GDP•Consumption (C)• Investment (I)•Government Spending's (G)•Net Exports (X – M)

To Calculate GDP

Consumption It is Household Final Consumption Expenditure It Includes• Durable Goods• Non-Durable Goods and• Services

Eg: Food, House Holds, Medical Expenses, Rent, Jewellery, Gasoline, etc.

Investment Investment by Business or Households in Capital. It Includes• Construction of New Mine.• Purchase of Machinery or Equipment for Factory.• Purchase of software.• Expenditure on New Houses.• Buying Goods and Services.

Investments on Financial Products is not included in Investments.

Government Spending's Total Government Expenditures on Final

Goods and Services. It Includes• Investment Expenditure by Government.• Purchases of weapons for Military.• Salaries of Public Servants.It does not include any transfer payments,

such as social security or unemployment benefits.

Net Exports (X – M)Gross Exports (X)• All Goods and Services Produced for

Overseas Consumption.

Gross Imports(M)• Any Goods or Services Imported for

Consumption.

Indian Economy-Facts on India GDP• Indian Economy is the 10th Largest Economy in the world.• India's GDP is Ranked 7th in GDP Global Ranking.• India is one of the most rapidly growing economies in the world.• The GDP of India in the Year 2015 was US $2183 Billion.• Ranks 3rd pertaining to Purchasing Power Parity (PPP) according to

world bank.• The Growth Rate of India GDP in 2015 is 7.3%.• Per capita income in India is $1,820 at Nominal and $6,664 at PPP.

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