gross domestic product (GDP)

gross domestic product (GDP)

The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the economy has grown by 3% over the last year.

GDP = private consumption + gross investment + government spending + (exports − imports), or

Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total. 

The income approach, which is sometimes referred to as GDP(I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes less any subsidies. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports.

As one can imagine, economic production and growth, what GDP represents, has a large impact on nearly everyone within that economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It's not hard to understand why: a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in arecession.

GDP is calculated by the Central Statistics Office at 2004-05 prices.

Industry	Gross Domestic Product		% changes over previous year
	2012-13		2012-13
	Q1	Q2	Q1	Q2
1.  agriculture, forestry and fishing	172402	138453	2.9	1.2
2.  mining and quarrying	26282	24462	0.1	1.9
3.  manufacturing	196544	194323	0.2	0.8
4.  electricity, gas and water supply	25867	25245	6.3	3.4
5.  construction	107087	103840	10.9	6.7
6.  trade, hotels, transport and communication	372192	369526	4	5.5
7.  financing, ins., real est.  and business services	249575	251103	10.8	9.4
8.  community, social and personal services	156327	186969	7.9	7.5
GDP at factor cost	1306276	1293922	5.5	5.3

Gross Domestic Product in H1			% change Over previous year H1
2010-11	2011-12	2012-13	2011-12	2012-13
294282	304354	310855	3.4	2.1
51702	50267	50744	-2.8	0.9
370204	388960	390867	5.1	0.5
44782	48757	51112	8.9	4.8
184821	193856	210927	4.9	8.8
634344	708146	741718	11.6	4.7
414676	454663	500678	9.6	10.1
304325	318718	343296	4.7	7.7
2299136	2467721	2600198	7.3	5.4

India's GDP Growth Slows to 5.3 Percent in Q3

India’s economy has expanded by just 0.6 over the previous quarter and 5.3 percent over the previous year in the third quarter.  The economic activities which registered significant growth in the fourth quarter year-over-year are construction at 6.7 per cent, trade, hotels, transport and communication at 5.5 per cent, financing, insurance, real estate and business services at 9.4 per cent, and community, social and personal services at 7.5 per cent. The growth rates in agriculture, forestry & fishing is estimated at 1.2 per cent, mining and quarrying at 1.9 per cent, manufacturingat 0.8 per cent, electricity, gas and water supply at 3.4 per cent in this period. According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 1.8 per cent, 0.2 per cent and 2.8 per cent, respectively in Q3 2012, as compared to the growth rates of (-) 4.1 per cent, 3.4 per cent and 10.5 per cent in these industries in Q3 2011. The key indicators of construction sector, namely, cement and consumption of finished steel registered  growth rates of 5.1 per cent and 2.3 per cent, respectively. Exports have slowed down as a result of Europe’s sovereign debt crisis that has slowed exports. Investment has declined as the central bank has maintained high interest rates to curb inflationary pressures.  Amid fears of a credit downgrade, the government's poor fiscal position has not allowed for expansive fiscal policy to stimulate the economy towards the target growth rate.

The economy of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity(PPP).[1] The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF.[13]

The independence-era Indian economy (from 1947 to 1991) was based on a mixed economy combining features of capitalism and socialism, resulting in an inward-looking, interventionist policies and import-substituting economy that failed to take advantage of the post-war expansion of trade.[14] This model contributed to widespread inefficiencies and corruption, and the failings of this system were due largely to its poor implementation.[14]

In 1991, India adopted liberal and free-market oriented principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V. Narasimha Rao the thenPrime Minister who eliminated License Raj a pre- and post-British Era mechanism of strict government control on setting up new industry. Following these strong economic reforms, and a strong focus on developing national infrastructure such as theGolden Quadrilateral project by Atal Bihari Vajpayee, the then Prime Minister, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people.

India recorded the highest growth rates in the mid-2000s, and is one of the fastest-growing economies in the world. In 2006-07 fiscal year India had an unprecedented 9.6% growth over previous year owing to a sudden surge in the economies of the backward states. India has recorded a growth of over 200 times in per capita income in a period from 1947 (249 rupees 9 annas 2 paise) to 2011. The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labour force, growth in the manufacturing sector due to rising education levels and engineering skills and considerable foreign investments. India is the nineteenth largest exporter and tenth largest importer in the world. Economic growth rate stood at around 6.5% for the 2011–12 fiscal year.

Rank	10th (nominal) / 3rd (PPP)
Currency	1 Indian Rupee (INR) (₹) = 100 Paise
Fiscal year	1 April – 31 March
Trade organizations	WTO, SAFTA, G-20 and others
Statistics
GDP	$1.847 trillion (nominal: 10th; 2011) $4.530 trillion (PPP: 3rd; 2011)
GDP growth	5.3% (Q3, 2012)
GDP per capita	$1,514 (nominal: 139th; 2011) $3,652 (PPP: 125th; 2011)
GDP by sector	agriculture: 17.2%, industry: 26.4%, services: 56.4% (2011 est.)
Inflation (CPI)	WPI: 7.45% (Oct 2012) CPI: 9.9% (Nov 2012)
Population below poverty line	29.8% (2010) (Note: 32.7% live on less than $1.25 a day and 68.7% live on less than $2 a day)
Gini coefficient	36.8 (List of countries)
Labour force	487.6 million (2011 est.)
Labour force by occupation	agriculture: 52%, industry: 14%, services: 34% (2009 est.)
Unemployment	9.4% (2011 est.)
Average gross salary	$1,410 yearly (2011)
Main industries	textiles, chemicals, food processing,steel, transportation equipment, cement,mining, petroleum, machinery, software,pharmaceuticals
Ease of Doing Business Rank	132nd (2012)