What actually is GDP?
GDP is abbreviated as a gross domestic product. It means the value of total goods and services produced and sold out in a country during a specific period of time. Generally, GDP is measured for a quarter and final year. This is an economic factor. It shows the rank of the country worldwide in the economic sector. GDP should match the income and needs of the population. GDP is the main thing to measure in economic development. This is an economic tool for development.
GDP counts the final price. Because in order to aware of counting again and again. GDP became an important thing in the development of a country. From the year 1996 data is recorded quarterly but before that, they recorded annually.
History of GDP.
The concept of GDP came into action in the late 18th century. The latest concept was started in the year 1934 by American economist Simon Kuznets. This concept has been become a major one and declared it at a conference in 1944.
What is meant by Gross?
Gross means the final value. Gross means the amount that did not include the tax price. But other necessary extra amounts. Simply amount without taxes. So This excludes overall deduction.
What does Domestic refer?
Domestic means products produced only in specific geographical borders. So simply total goods produced in borders.
What is a product?
The product is output or goods. So simply called as the output to be sold.
How is GDP calculated?
There are three methods for calculating the annual and quarterly GDP. So the final value must be the same because it is a major factor in the economic sector.
Output method or production method: market value for the goods and also services are calculated here. But only within the borders of one own nation. So Simply the sum of the total goods minus the cost of inputs. At the level of production. But Instead of counting the total amount it is taken as a total output value and deducts the surplus.
GDP= REAL VALUE – TAXES +SUBSIDY
Expenditure method: the total expenditure spent on specific goods or products within the borders is calculated. So Simply stated as all the purchases made by users in the country.
Income approach: the total income gained by a company in production and labor. This is also within the borders. GDP=actual cost+tax-subsidy. Calculated as the total income that is utilized for production. it may also include wages of employees and rent and all.
There are three major sectors involved in the race. Agriculture, allies, industry, and services.
GDP Record at 2020.
India’s economic growth has reached much negative. This is the worst count from the year 1947. And also worst of all G20 countries. India’s GDP decreased to -23.9% More than 80k cases are registered with corona. No country is recording these many cases. JEE AND NEET exams are conducted in which there is no social distancing. India performed worst in economics. Demonetisation, Bad economic policies, and Bank fraud are a few of the reasons. But The primary reason: we must say the pandemic situation of COVID-19 is the major reason for this effect.
Reasons for GDP decline:
1. Demonetization: In the year 2016, Modi’s government banned the old notes and new notes are published. Manmohan Singh guessed the situation and said India will become economically backward in the coming year. Even black money is converted into the new one.99.3% of the money is brought back. This is a useless disaster.
2. GST(Goods and services tax): Normal people are facing many problems for this GDP. the amount had been a slight increase but people are unable to pay the amount. This is not a good plan for people. MSME workers like grocery, vendors, and all are seriously affected by this situation. Imports and exports are stopped at a maximum.
3. Bankruptcy: Governor Raghuram Rajan sent a letter to the newly formed BJP government. Saying that many businesses men took loans and they may not return it. Before the situation becomes bad try to collect it. 2016- Ujjit Patel governor. Non-performing loans (NPL) the duration of payment is extended from 90 days to 180 days. He did not like the decision and resigned to his job. Shakuntala Das retired IAS officer also a better condition of the situation.
So GDP affects us in finance, investment, and job opportunities. Investors compare the because data of the growing companies and invest in better opportunities. But They are highly in demand to purchase with companies with high growth. So Unemployment faces many problems if GDP decreases. But Countries with low economic growth suffer from lots of unemployment.
So We should relate it to the student’s life. So if a student studies for a year and the annual exam marks are considering. But The same situation is applicable here. But student’s marks Are personal. And GDP is annual. Because of these reasons, more than 12 million people went into poverty. Our finance minister Nirmala Sitaram says that it’s an “ACT OF GOD”.
Farmer’s suicide and daily wage workers not getting enough and also nothing work.
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