You may have heard the term GDP(Gross Domestic Product). Then lets know what it means and why it is?

GDP is a measure of a country's finished goods and services during specific time period.

By adding price of all the goods and services that were produced in the country gives a value called GDP.

We cannot say GDP of 2020 or GDP of 2021 because it calculate based on Financial year not based on Calendar year. Means the Calendar year starts from January and ends on December whereas the Financial year ranges April to march. Hence we can say GDP of 2017-18 or 2019-20.

When comes to products like Mobile Phone, different parts of the product get manufacture at different unit, but all the parts separately won't include for GDP instead the final goods are considered for GDP not the intermediate goods.                                                                                         Example for intermediate goods like battery, Processors.,

As soon as knowing about this concept one question rises in our mind, how they going to get all such products details and who is responsible for this?

Yes, Central Statistical Office is sole response for this GDP calculation. They collects the data from different departments and State Government.

For every single item there are two prices, they are Factor Price and Market Price.

         Factor Price + Taxes = Market Price 

GDP was calculated based on Factor Price earlier, Since 2015 it is calculated using market price.       

Let us know about the sectors that belongs or accountable for GDP calculation.  It classified as Primary, Secondary and Tertiary Sector.

Primary Sector - agriculture, forestry, fishing, and mining & quarrying

Secondary Sector - manufacturing, electricity, gas, water supply & other utility services, and construction

Tertiary sector - services

Note: Largest sector in Indian Economy is Service sector. 

But the disadvantage is, Informal sectors or Unorganized sector are not accountable for GDP. Informal sector refers to the work where the workers are self employed and the businesses are not registered for national or regional levels and not paying taxes properly.

example for this kind of sectors are food market(hotels),  street vendors, etc.,

In India around 384 million people working in Informal sector. By this we can estimate why India's GDP is low.

GDP growth rate is nothing but the percentage of increment in GDP compared with previous year GDP. As per the records the GDP growth rate fallen from GDP 8% in Financial year 2017(FY17) to 4% in FY20.

One more thing you must know about GDP is, the products that imported from foreign countries are not included for GDP. Indirectly or directly the importing goods are affecting India's economy.