Meani ng Methods to Calculate: 3 book methods, 2 real methods of CSO Demonetiz ation: Effect? GDP: Gross Domestic Product Current price Constan t price GDP deflator Growth Rate GNP NNP
Gross Domestic Product (GDP) सकल घरेलू उतपाद (2016) GDP is the Market value of All final goods & services Produced within a country For a given time period . $68 million Jaguar: 50k cars mfg. Exploration: Rs.701 cr. Rs.40 cr (2016) ++ Wages, Profit, Interest, Dividend ++ Profit -- Remittan ce ++ Remittance, gift, donation Rs.100 cr (2014)
Final Private Consumption (C) • Not intermediate goods like steel, rubber-> only final product (desi Nano + imported Ferrari also counted ) • Existing House -> “rent” to yourself. • New House purchase: No. Investment (I) • New House , building, capital goods/asset. • Intermediate goods for future production. • Capital from Share, Bond, Debenture – used in above activities GDP calculation method #1= खरा र , the Expenditure Because if something is ‘produced’, then someone must have spent rupees to make it or buy it
GDP calculation method #1: Consumption (C) +investment (I) +Government “purchase” (G) • Salaries, Procurement yes • But, scholarship, Widow pension, Unemployment Allowance, “UBI(!)” etc. “Transfer Payments”.. No Private final consumption (C) +Foreigner spending in India (e X port-i M p) • + Google paying call centre “service” + Arnold Buying Desi Nano • -- imported Ferrari [private final consumption-walli, because it’s produced outside India] Because if something is ‘produced’, then someone must have spent rupees to make it or buy it
+Consumption (Final) +Investment +Government “Purchase” Foreigner’s Expenditure Or NET Export (e X port-i M port) GDP Calc: Expenditure method: GDP= C + I + G + (X – M) GDP at Current Market Price Inflation price adjust with base year (2011) GDP @Constant market prices
1. Skip 2. Attempt 3. Mark n Review k Q u e s ti o n f o r P r e If Government of India starts giving universal basic income to all of its citizens, where will it be counted in the Expenditure method of GDP calculation? A. Government Expenditure (G) B. Private consumption (C) C. Investment (I) D. All of above depending on recipient being a govt employee, private citizen or entrepreneur.
PFCE: private final consumption Expenditure; GFCE: Government final consumption Expenditure GFCF: gross fixed capital formation; CIS: change in stocks…. Then adjusted @base price (2011) Only for information. Else bookish formula “CIGXM” is sufficient. Will explain after a few slides GDP calc. Expenditure method: Book formula-> Real CSO formula? Growth rate over last year
Expenditure • C + I + G + (X – M) • Consumption, investment, Govt. purchase, Net export Production: Gross Value Added (GVA) • Total Value of Sale – Cost of intermediate goods Income Method (WIPR0) • W+I+P+R • Wages, interest, profit, rent GDP Calculation: THREE Methods
Rs.00 • Wage( W) • Interes t(I) • Profit(P ) • Rent(R ) Rs.1 lakh • Wage( W) • Interes t(I) • Profit(P ) • Rent(R ) Rs.5 lakh • Wage( W) • Interes t(I) • Profit(P ) • Rent(R ) Rs. 10 lakh Final product GDP calculation Method #1: Expenditure (CIGXM) Method#2: Gross Value Added (Production method) Total Sale Rs. 16 lakh (-)Rs. 6 lakh Cost of intermediate goods = Rs. 10
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- Fall '19
- gross domestic product, GVA