NOMINAL AND REAL GDP.

-

 







Since January 2015, National Statistical Office (NSO) under the Ministry of Statistics and 
Programme Implementation (MoSPI) has changed the base year for calculation of GDP to 
2011-12. So, if we want to calculate India's Real GDP for 2014-15, we will have to take the 
quantities produced in 2014-15 and the prices of 2011-12 (base year). And if we want to 
calculate the Nominal GDP of 2014-15 then we will have to take the quantities produced in 
2014-15 and the market prices of the same year i.e. 2014-15. 
Before 2015, NSO was not using market prices to calculate GDP, rather it was using Factor 
Cost i.e. Market Price excluding indirect taxes and subsidies. Now, as per the global best practices and the IMF's World Economic Outlook projections based on GDP at market prices, 
India has changed its methodology of GDP calculation at market prices.
In India, economic growth is measured by real GDP i.e. GDP at constant Market Prices.
economic growth from 2011-12 to 2012-13 will be measured by change in Real GDP 
(and not nominal GDP) which is 11.2 %.
Real GDP is steadily/consistently increasing from 2011-12 to 2014-
15 but "change in real GDP" is decreasing from 11.2% to 4.6%. (And same is true for 
nominal GDP also). Above is a case of economic growth as real GDP is increasing.




Comments

Post a Comment

Popular posts from this blog

IN THE GRAVE.

-
Image
إِنَّا ِلِلَّٰهِ وَإِنَّا إِلَيْهِ رَاجِعُونَ Indeed, we belong to Allah, and indeed, to Him we...... When a believer dies 🌿seventy thousand angels participate in his funeral🍁 when he enters the grave📿 Munkir and Nakeer come to him and pose questions to him 🍁 they ask him #Who is your god? What is your religion? And who is your prophet? The believer replies: My Lord is Allah, my prophet is Muhammad, and my religion is Islam. At that moment the grave is expanded as far as the eye can see and the foods of Paradise will be brought there for him and the breeze of Paradise will welcome him.❤ It is this, which is mentioned in the Holy Quran: فَأَمَّآ إِن كَانَ مِنَ الْمُقَرَّبِينَ * فَرَوْحٌ وَرَيْحَانٌ وَجَنَّتُ نعِيمٍ 📿 If he is one of those drawn nigh (to Allah) then happiness and bounty and a garden of bliss (shall be his). (56:88-89). ☝وَتَصْلِيَةُ جَحِيمٍ👈 And burning in hell. (56:94) That is, in the hereafter, he would be consigned to Hell. .When the co...
Read more

Monopolistic Competition – definition, diagram and examples

-
Image
Definition:  Monopolistic competition is a market structure which combines elements of monopoly and competitive markets. Essentially a monopolistic competitive market is one with freedom of entry and exit, but firms can differentiate their products. Therefore, they have an inelastic demand curve and so they can set prices. However, because there is freedom of entry, supernormal profits will encourage more firms to enter the market leading to normal profits in the long term. A monopolistic competitive industry has the following features: Many firms. Freedom of entry and exit. Firms produce differentiated products. Firms have price inelastic demand; they are price makers because the good is highly differentiated Firms make normal profits in the long run but could make supernormal profits in the short term Firms are allocatively and productively inefficient. Diagram monopolistic competition short run In the short run, the diagram for monopolistic competition is the sa...
Read more

Explain INVESTMENT ||| Indian economy.

-
Image
INDIAN ECONOMY. That part of the final output which comprises of physical capital goods is called gross  investment. So, investment in a country is not measured as money put in a business or any  economic activity but it is basically that portion of the final output (GDP) which consists of  capital goods. Suppose there is only one factory (capital good) in a country, which is worth Rs. one lakhs  and is producing consumption goods worth Rs. 700 and capital goods worth Rs. 300 in a  particular year (say 2019-20) in an economy. This means that the GDP in 2019-20 will be  Rs. 1000 (which is the total production of both consumption and capital goods) and the  gross investment in the economy will be Rs. 300 or (Rs 300/Rs1000) 30%, as investment is  measured as the percentage of output which consists of capital goods. Now when the factory runs for a year then wear and tear happens in the factory which is  called depreciation...
Read more