GDP full form or meaning is the Gross Domestic Product.
GDP means the entire production of any country. The entire production that takes place in the field of agriculture, industry and services is called GDP of that country.
Mix the products and services that are ready in a country in 1 year, and price it according to the market, then it is called the GDP of that country’s economy.
For example, let us assume that only one product is made in India and that is a pen.
If 10 pens of 20 rupees were made in a year, then India’s GDP was Rs 200.
In other words, we can say that GDP means complete production of a country of 1 year
With the help of GDP, we can easily measure the economy and progress of the country.
GDP shows the economic status of a country, hence it is also called growth rate.
History of GDP
The GDP calculation began in the US in 1934 when American economist Simon Kuznets presented the National Income Report 1929 to 1934 in the American Parliament.
In this report, for the first time, he included the value of every product and services in the country.
In India too, the economy is measured on the basis of GDP since 1950.
How GDP is calculated?
A standard formula has been prepared for calculating GDP, which is considered by most countries of the world today and calculates the GDP of their country accordingly.
GDP = C + I + G + (X – M)
here c stands for- Consumption(all private consumer spending within nation economy)
I stand for- the sum of a countries investment
G stands for – total government expenditure
X stands for – total export of the country
M stands for – total imports of the country
or in other words, we can use this formula
GDP = total private consumption + total gross investment + total government investment + total government spending + (exports – imports). please note that, Nominal value changes due to shifts in quantity and price.
When the GDP calculation of any country is done, apart from agriculture, industry and service, the most impact is on how much goods are exported or imported in that country.
For example, if we buy something in India, which is made in China, then the price of that item will be added to China’s GDP calculation, and it will add negative impact in India’s GDP calculation.
GDP of India
India’s GDP is calculated once every 3 months and it is seen that what is the current GDP as compared to the previous quarter.
India is one of the fastest-growing economies in the world, having highest GDP.
India’s current GDP is close to two lakh crores rupees, Which is more than 2% of the total GDP of the world.
India’s GDP growth has been close to 5% in 2019-20
In India, the responsibility of measuring GDP rests with the Central Statistics Office (CSO) under the Ministry of Static and Program Implementation.
Drawbacks of GDP calculation
Many economists believe that there are many shortcomings in the GDP calculation of India and many other countries, which need to be overcome, some of the shortcomings are as follows-
- Currently, black money is not calculated in the model of GDP calculation.
- If a company makes profit by going to another country, then its income is not added to GDP.
- In GDP calculation, only the economic aspects are taken into account, social status or living conditions of the people are not taken into consideration.
- The GDP calculation also excludes children’s health and education quality.
some other popular full forms of GDP
GDP- Gross Domestic Product
GDP- Gateway Discovery Protocol
GDP- Graduate Development Program