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INDIA GDP Per Capita 2019 - Revenue Analysis

IndianMoney.com Research Team | Posted On Monday, December 30,2019, 05:40 PM

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INDIA GDP Per Capita 2019 - Revenue Analysis

 

 

What is GDP Per Capita?

GDP Per capita is a means of measuring a country's standard of living and economic prosperity. GDP means Gross Domestic Product, in other words, the economic output of a country. GDP accounts for everything that is produced within the boundaries of a country. Dividing GDP with a country's total population gives the GDP per capita. It could be in terms of country's corresponding currency or in terms of international currencies like the US dollar, Euro and so on.

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See Also: How GDP is Calculated in India?

INDIA GDP per Capita 2019 - Revenue Analysis

To understand the calculation of GDP, let's take a look at the components of GDP. The four basic components of GDP are:

1. Personal consumption expenditure: This indicates how much the citizens of a country spend on consumer goods and services.

2. Business investment: This is nothing but the amount of money spent by business organizations to produce consumer goods.

3. Government spending: The Government spends money on various goods and services. This includes education, healthcare etc. All these expenses fall under the category of government spending.

4. Net exports: Exports and imports have a major influence on the country's GDP. Exports are added and imports are subtracted. This is because exports contribute towards cash inflow and imports result in cash outflow.

The formula for calculating GDP is: C+I+G+(X-M)

Where,

C= Personal consumption expenditure

I=   Business investment

G= Government spending

X=   Exports

M= Imports.

See Also: Why Our GDP Growth is Going Down?

India’s GDP per capita 2019 - Revenue Analysis

India’s GDP was $2,041 in March 2019. This data is updated each year from 1958 to 2019.

Although GDP looks like a simple concept, it is a complex one to calculate. Different countries use different methods for calculation.

In India, the Central Statistics Office (CSO) is responsible for collecting macro data, keeping statistical records and calculating the GDP. The CSO works in coordination with various other central and state government departments and agencies.

India's GDP is calculated using two different methods. Factor cost method and expenditure method. The factor cost method takes into account 8 different sectors and calculates the net change. Net change is nothing but the difference between a commodity's close price and the current price. The 8 different sectors are:

1. Agriculture, forest, fishery

2. Mining and quarrying

3. Manufacturing

4. Construction

5. Trade, hotels, transport, and communication

6. Electricity, gas, water supply

7. Community, social and personal services

8. Financing, insurance, real estate, and business services.

A detailed report on the % change in each sector is calculated and compared with the previous year. This helps business investors make strategic business decisions, as well as the government, implement policies and programs to enhance those sectors that are on the decline.

The second method is the expenditure method. This method is based on current market prices. It calculates various expenses related to household consumption, government costs, net trade and net investments.

The expenditure method gives a clear picture on which sector of the economy contributes more to the country's GDP.

Although the results of these two methods may not match, they would be close enough to reach a conclusion.

See Also: What is GDP? Types, Growth Rate and Per Capita Income

Economy of India

The Indian economy is considered to be a developing one. From ancient times, India's economy has gone through vast changes in vis-a-vis inflation, price recession, etc. A few important features of the Indian economy are given below:

  • Agriculture is a significant sector. Its contribution towards the GDP in India is higher than the world average of 6.4%. More than 50% of India's employment is agriculture-based, either directly or indirectly. It also contributes appreciably to exports.
  • Mixed economy: India is a perfect blend of private and public sector companies.
  • Human capital: India has the second-largest population in the World. This often leads to a huge demand for goods and services. But at the same time; it has the added advantage of having large human resources. Most of these candidates are educated, young and career-oriented. With the right number and kind of opportunities, India can capitalize on this.
  • Uneven wealth distribution: One of the disappointments is that wealth is distributed unevenly across society. This means the rich get richer and the poor end up poorer. According to certain studies, the richest 10% of Indians own 80.4% of the country's wealth. For a healthy economy, it is important to bridge this gap between the rich and the poor.
  • Service sector: India's service sector is growing real fast. It employs 28.6% of the total population.

India Exports and Imports 2019

Exports and imports are important for the economic prosperity of a country. This is because not all countries have access to the skills and resources required for the production of various goods and services. For eg: Middle Eastern countries have a lot of crude oil that they export to various parts of the World. This leads to economic growth of both exporting as well as importing country.

In India, the ministry of commerce and industry administers all foreign trade on behalf of the Central Government.

Let's take a look at India's exports and imports for the year 2019:

Exports in India have fallen by 0.39% compared to the previous year. In March 2019, the exports in India amounted to an average of $32,550 million making it a record high compared to 1958. The most important export commodities from India are:

Diamonds ($9.3billion)

Refined petroleum ($25.4billion)

Rice ($5.32 billion)

Aluminum ($1.57billion)

Raw sugar ($1.45billion)

Packaged medicines ($11.6billion)

Leather footwear ($1.88billion)

Jewelry ($12.6billion)

It is great to know that India is one of the largest diamond exporters in the World with 18.8% market share worth $127billion in 2018.

Imports in India fell by 12.7% in comparison to the last fiscal year. There has been a decline in gold imports from April to September 2019. This is a positive sign which shows people shifting interest towards other investments. Gold is the second largest import by value.

The most important import commodities are:

Crude Petroleum ($60.7billion)

Gold ($22.9billion)

Copper ($2.46 billion)

Palm oil ($5.6billion)

Telephones ($10.6billion)

Vehicle parts ($3.66billion)

The idle export import equation must be: export-import = positive change. This means there is surplus foreign cash inflow. This will positively enhance the country's GDP.

Top 10 States GDP per capita

SL.NO

STATES

GSDP In Lakh Crore  (Rupees)

1

Maharashtra

27.96

2

Tamil Nadu

17.25

3

Karnataka

15.88

4

Uttar Pradesh

12.80

5

Gujarat

14.96

6

West Bengal

13.14

7

Andhra Pradesh

10.49

8

Telangana

10.49

9

Rajasthan

9.29

10

Kerala

8.76

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