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Related Categories Economy Quiz. This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. The first method is based on economic activity at factor cost , and the second is based on expenditure at market prices.
Further calculations are made to arrive at nominal GDP using the current market price and real GDP inflation-adjusted. Among the four released numbers, the GDP at factor cost is the most commonly followed figure and reported in the media. The factor cost figure is calculated by collecting data for the net change in value for each sector during a particular time period. The following eight industry sectors are considered in this cost:.
Here is an edited sample report showing an overall GDP change of 6. For example, mining and quarrying declined by 2. Using these numbers, it is easy to see the current state of the economy and its different subsectors. Investors can make informed business and investment decisions and the government can implement policies accordingly. The expenditure at market prices method involves summing the domestic expenditure on final goods and services across various streams during a particular time period.
It includes consideration of expenses towards household consumption, net investments i. The GDP numbers from the two methods may not match precisely, but they are close. The expenditure approach offers good insight into which parts contribute most to the Indian economy.
For example, domestic household consumption, which forms Any economy with a high concentration on exports will be more susceptible to the effects of global recessions. Annual GDP data are released on May 31, with a lag of two months. The financial year in India follows an April-to-March schedule.
The first figures released are quarterly estimates. As more and more accurate datasets become available, the calculated figures are revised to final numbers. No one knows precisely why India's fiscal year runs from April 1 to March Most likely, it's a holdover from the centuries of British rule the U.
As it happens, April 1 marks Chaitra Sukhladi, the beginning of the Hindu New Year, so the date already has a special meaning for many Indians. Less romantically, many crops are harvested in February and March.
Agriculture remains a significant component of the Indian economy. Starting the new year in April allows time to estimate the income from crop yields. From to , India was the world's fastest-growing major economy, according to the International Monetary Fund.
India calculates GDP in two different ways. Both methods have advantages for the end-user, depending upon their needs. To assess the performance of different industry sectors, the factor cost GDP details are useful. Expenditure-based GDP calculations indicate how different areas of the economy are performing—whether the trade is improving, or whether investments are on the decline. They are Headline Inflation and Core Inflation. Headline Inflation is the measure of total inflation within an economy.
It includes price rise in food, fuel and all other commodities. Core inflation is also a term used to denote the extend of inflation in an economy. But Core inflation does not consider the inflation in food and fuel. This is a concept derived from headline inflation. There can be two set of factors that can cause inflation in an economy. They are Demand Pull and Cost Push. Both government and central bank Reserve Bank try to tackle inflation with their policies which are known as Fiscal and Monetary Policies respectively.
Fiscal policies correspond to tax related measures taken by government to control inflation money supply. Administrative measures taken by government like strengthening of Public Distribution System also plays a crucial role in curbing inflation. As we hinted in the beginning, inflation can occur because of high demand too. High demand on scarce resources will automatically increase prices.
This is called demand pull inflation. But demand for a commodity is a good sign from the industry perspective. Industries now will try to produce more commodities to reap the benefit of high prices and demand. More production will trigger GDP growth.
Alex Andrews George is a mentor, author, and entrepreneur. He is the author of many best-seller books like 'Important Judgments that transformed India' and 'Important Acts that transformed India'. Really liked the way all the things are so well orderly and mannerlly thought here with best example and relating it to indian economy helps to understand batter the economy of india… hearty thanks to u sir…i would like read such important topics here also….
Also, CFPI i. Please verify the facts at your level and change accordingly. Thanks Clearias Your notes are really very good and helpful. But sir your notes are not in sequence , It is scattered.
If you can serialize the notes then it will be more useful and sir please update the notes along with time. Thank you for the feedback.
We will be updating the notes which need revision soon. Sir, I am studying now 12th std commerce with business maths group.
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