Gross Domestic Product GDP, is the broadest quantitative measure of India’s overall economic activity. GDP depicts the monetary value of all goods and services produced within India’s geographic borders in a specified time period. GDP indicates the economic performance of a nation. Higher the GDP, higher would be the growth. Following are the factors affecting GDP:
See Also: What is an Economy?
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Following are the types of GDP:
Nominal GDP: Nominal GDP is the GDP calculated at current market prices. Nominal GDP differs from real GDP that includes changes in the price levels due to inflation/deflation or a rise in the overall price levels. Typically, economists use a gross domestic deflator to convert nominal GDP to real GDP. Nominal GDP is measured in three ways
i) Expenditure approach adds the market value of all domestic purchases of final goods and services over a single year.
ii) Production approach, net production is determined by subtracting intermediate consumption from overall estimated output.
iii) Income approach is the sum of all the incomes earned by firms and households in a single year, being all the income received in the form of wages, profit, interest and rent.
Real GDP: Real gross domestic product (GDP) is an inflation-adjusted GDP that depicts the value of all goods and services produced by an economy over a given year, expressed in base-year prices, and is referred to as constant-price, inflation-corrected GDP. Unlike nominal GDP, real GDP accounts for the changes in price levels and provides a more accurate reflection of economic growth.
The following equation is used to calculate the GDP:
GDP = C + I + G + (X – M)
GDP = private consumption + gross investment + government investment + government expenditure + (exports – imports)
As mentioned earlier, GDP is a reflection of how a Nation is performing when it comes to the economy. It is the total value of goods and services over a certain period. If the GDP of a country is lower than the previous year, then it means that there has been a slowdown. Lower output means less production and this may lead to unemployment, which is a direct impact on any individual.
Moreover, citing lower GDP, foreign investors may lose confidence and would not want to invest in a country. This means lesser funds in the economy and hence lesser spending on facilities and infrastructure. With already lowered productions and capital inflows from abroad, firms may take the extreme actions of laying-off employees.
Indian nominal GDP is estimated to be around $2.948 trillion and $10.685 trillion. The Indian economy is a developing mixed economy. It is the 6th largest economy in the world by nominal GDP and 3rd largest in terms of purchasing power parity PPP. The Indian economy is ranked 139th in per capita GDP. India started achieving 6-7% annual growth rate after the economic liberalization in the year 1991. In 2018, Indian economy became the world’s fastest emerging economy surpassing China.
The below table shows the GDP growth rate in India from the year 1980:
Year |
GDP |
GDP per capita |
Share of world |
GDP growth |
(in Bil. US$ PPP) |
(in US$ PPP) |
(GDP PPP in %) |
(real) |
|
1980 |
382 |
557 |
2.89 % |
5.3 % |
1981 |
442.7 |
632 |
3.01 % |
6.0 % |
1982 |
486.5 |
680 |
3.11% |
3.5% |
1983 |
542.6 |
742 |
3.25 % |
7.3 % |
1984 |
583.3 |
781 |
3.23 % |
3.8 % |
1985 |
633.6 |
830 |
3.29 % |
5.3 % |
1986 |
677.3 |
869 |
3.33 % |
4.8 % |
1987 |
722.1 |
907 |
3.33% |
4.% |
1988 |
819.3 |
1,007 |
3.49 % |
9.6 % |
1989 |
901.8 |
1,086 |
3.57 % |
5.9 % |
1990 |
986.9 |
1,164 |
3.62 % |
5.5 % |
1991 |
1,030.60 |
1,193 |
3.57 % |
1.1 % |
1992 |
1,111.80 |
1,261 |
3.38 % |
5.5 % |
1993 |
1,192.40 |
1,323 |
3.48% |
4.8% |
1994 |
1,298.80 |
1,413 |
3.60 % |
6.7 % |
1995 |
1,426.30 |
1,522 |
3.74 % |
7.6 % |
1996 |
1,562.10 |
1,636 |
3.87 % |
7.6 % |
1997 |
1,653.10 |
1,698 |
3.87 % |
4.1 % |
1998 |
1,774.40 |
1,789 |
4.00 % |
6.2 % |
1999 |
1,954.00 |
1,935 |
4.19% |
8.5% |
2000 |
2,077.90 |
2,018 |
4.16 % |
4.0 % |
2001 |
2,230.40 |
2,130 |
4.26% |
4.9% |
2002 |
2,353.10 |
2,210 |
4.30 % |
3.9 % |
2003 |
2,590.70 |
2,395 |
4.46 % |
7.9 % |
2004 |
2,870.80 |
2,612 |
4.58 % |
7.8 % |
2005 |
3,238.30 |
2,901 |
4.77 % |
9.3 % |
2006 |
3,647.00 |
3,218 |
4.95 % |
9.3 % |
2007 |
4,111.10 |
3,574 |
5.16% |
9.8% |
2008 |
4,354.80 |
3,731 |
5.21 % |
3.9 % |
2009 |
4,759.90 |
4,020 |
5.68 % |
8.5 % |
2010 |
5,312.40 |
4,425 |
5.95 % |
10.3 % |
2011 |
5,782.00 |
4,750 |
6.09 % |
6.6 % |
2012 |
6,209.90 |
5,034 |
6.23 % |
5.5 % |
2013 |
6,713.10 |
5,371 |
6.41% |
6.4% |
2014 |
7,340.00 |
5,797 |
6.65 % |
7.4 % |
2015 |
8,024.60 |
6,255 |
6.96 % |
8.2 % |
2016 |
8,705.00 |
6,697 |
7.23 % |
7.1 % |
2017 |
9,459.00 |
7,183 |
7.45 % |
6.7 % |
As per the latest records, Goa has the higher per capita GDP of all the Indian states. Highly populous states of Uttar Pradesh and Bihar have the lowest per capita GDP in India. Underperforming states of UP, Bihar and Jharkhand have become a burden on tax payers as they eat up tax more than any other states. The below table provides the data of GDP per capita of Indian states and union territories, No data is available for the union territories of Dadra and Nagar Haveli, Daman and Diu and Lakshadweep.
Rank |
State/Union territory |
NSDP per capita |
Data year |
Per capita PPP 1 |
(nominal) |
(2017 INT$)[1] |
|||
1 |
Goa |
375,554 (US$5,200) |
2016–17 |
INT$21,140 |
2 |
Delhi |
329,093 (US$4,600) |
2017–18 |
INT$18,520 |
3 |
Sikkim |
297,765 (US$4,100) |
2017–18 |
INT$16,760 |
4 |
Chandigarh |
242,386 (US$3,400) |
2015–16 |
INT$13,640 |
5 |
Puducherry |
198,156 (US$2,800) |
2017–18 |
INT$11,150 |
6 |
Haryana |
196,982 (US$2,700) |
2017–18 |
INT$11,090 |
7 |
Telangana |
181,034 (US$2,500) |
2017–18 |
INT$10,200 |
8 |
Maharashtra |
180,596 (US$2,500) |
2017–18 |
INT$10,170 |
9 |
Uttarakhand |
177,356 (US$2,500) |
2017–18 |
INT$10,000 |
10 |
Karnataka |
174,551 (US$2,400) |
2017–18 |
INT$9,830 |
11 |
Tamil Nadu |
166,934 (US$2,300) |
2017–18 |
INT$9,400 |
12 |
Kerala |
163,475 (US$2,300) |
2016–17 |
INT$9,200 |
13 |
Himachal Pradesh |
160,719 (US$2,200) |
2017–18 |
INT$9,050 |
14 |
Gujarat |
156,527 (US$2,200) |
2016–17 |
INT$8,820 |
15 |
Punjab |
142,958 (US$2,000) |
2017–18 |
INT$8,050 |
16 |
Andhra Pradesh |
142,054 (US$2,000) |
2017–18 |
INT$8,000 |
17 |
Andaman and Nicobar Islands |
136,823 (US$1,900) |
2016–17 |
INT$7,700 |
18 |
Mizoram |
128,998 (US$1,800) |
2016-17 |
INT$7,260 |
19 |
Arunachal Pradesh |
119,481 (US$1,700) |
2016–17 |
INT$6,730 |
20 |
Rajasthan |
100,551 (US$1,400) |
2017–18 |
INT$5,660 |
21 |
West Bengal |
95,562 (US$1,300) |
2017–18 |
INT$5,380 |
22 |
Chhattisgarh |
92,035 (US$1,300) |
2017–18 |
INT$5,180 |
23 |
Nagaland |
90,168 (US$1,300) |
2016–17 |
INT$5,080 |
24 |
Jammu and Kashmir |
86,108 (US$1,200) |
2017–18 |
INT$4,850 |
25 |
Odisha |
80,991 (US$1,100) |
2016–17 |
INT$4,560 |
26 |
Tripura |
80,027 (US$1,100) |
2015–16 |
INT$4,520 |
27 |
Madhya Pradesh |
79,907 (US$1,100) |
2017–18 |
INT$4,510 |
28 |
Meghalaya |
73,291 (US$1,000) |
2016–17 |
INT$4,130 |
29 |
Assam |
67,303 (US$940) |
2016–17 |
INT$3,790 |
30 |
Jharkhand |
62,816 (US$870) |
2015–16 |
INT$3,540 |
31 |
Manipur |
58,501 (US$810) |
2016–17 |
INT$3,300 |
32 |
Uttar Pradesh |
55,339 (US$770) |
2017–18 |
INT$3,120 |
33 |
Bihar |
38,546 (US$540) |
2016–17 |
INT$2,170 |
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