What is GDP? Know in Detail

 You get to hear the word GDP in many places like in news channels and newspapers, but the question comes that what is this Full Form GDP and what is its contribution in the progress of a country as well as why and how it is used. So, let’s know what is GDP.

Actually, GDP is a measure of measuring the economy of any country, which is estimated that development is happening at some pace in a country, so the good GDP of any country shows the strong economy of that country.

 When GDP is calculated after every three months in India, there is a lot of debate on news channels because at what rate GDP is progressing in any country, whose estimates tell which common man does not easily understand that after all What is GDP.

So in today's article, we will know what is GDP Full Form and what are the types of GDP as well as how GDP is measured etc. So, if you want to get detailed and complete knowledge about GDP then you guys Do read this article completely once.

How and when did GDP start?

In the 1930s, the Second World War was over and the whole world was facing an economic recession and after about 10 years the whole world could come out of this economic recession, after that about such a way to find out the economic development of the country. The search began, which could be traced to the economic development of the country.

Since there was no way to measure the economic growth rate of the country at that time, the banking companies of the country came forward which included financial institutions and banks.

In this way, the task of measuring the economic development of the country was given in the hands of the banks, but due to no permanent way to measure the economic development of the country, this system also could not properly assess the economic development of the country and there were many flaws in this system. Was.

Then during the year 1935-44, this term GDP was first used in America, which was introduced by American economist Simon to his country America, which was presented in the US Congress and introduced the idea of ​​GDP for the first time.

After the Bretton Buds Conference in 1944, GDP was used by the World Bank and the International Monetary Fund to measure the economy and its annual growth, after which it became very famous and thus became the measure of the country's economic growth. Gaya.

What is the Full Form of GDP?

GDP Full Form i.e. the full name of GDP is "Gross Domestic Product" which is known as Gross Domestic Product and GDP is calculated after every three months in India, which is analyzed for the progress of the country.

What is GDP----Full Information

GDP is a means of estimating the economic development of any country, which is found out about the rate of economic growth and progress of a country. So it means that the economic development of the country is also increasing.

According to Wikipedia, GDP or Gross Domestic Product is a basic measure of the economic performance of an economy consisting of the market value of all final goods and services within a nation's borders in a year.

In simple words, the total value of goods or services produced in a country within a year is called GDP or Gross Domestic Product.

Suppose in 2019, 10 bags of rice were produced in our country and the cost of one bag of rice is Rs 500, then in 2019 the GDP of our country will be 10×500=5000. Now you people will say that it is also possible that out of these 10 bags of rice, 5 bags will be grown by the government, 3 bags will be grown by a private company and 2 bags will be grown by a foreign company. So in such a situation, whom should we add and whom should we leave.

So we do not care about who is producing, as we have already said, whatever is made or produced within the borders of our India, whether it is done by the government, whether by a private company or any other. The total value of the foreign company is called GDP of our country.

This is a very simple way to understand GDP, but in our country not only this ten sacks of rice is being produced, but there are countless such things that are being made in our country and as we have already told, apart from the things, service If we have to add areas too, then how is it possible to do such a complex calculation, while finding a solution to this problem, our economists have made 3 areas.

Three Major Components of GDP

Primary component – ​​In this the value of things related to the agricultural sector is extracted.

Secondary component – ​​In this, the value of things related to the industry sector is extracted.

Tertiary component – ​​In this the value of things related to the service sector is extracted.

Now in the end the values ​​of these three components are added and the value of these three is called GDP but inflation keeps on fluctuating, so the prices of goods and services also change, that is why GDP is divided into 2 parts.

Constant Price GDP – Because inflation keeps on fluctuating over time, therefore, the CSO (Central Statistics Office) sets a base year for the evaluation of production and services in India by the Central Statistics Office, on the basis of which the price of production and services is determined. The growth rate is fixed which is called Constant Prize GDP.

Current Prize GDP – This GDP is the second scale in which the inflation rate of that year is included along with the output value of GDP, which is called Current Prize GDP.

What are GDP FORMULA and how is it measured?

A formula was created to measure GDP, using which you can easily find out the economic development of the country which is as follows.

GDP = C + I + G+ (X – M)

C: Consumption

Here C means Consumption which is called Consumption i.e. personal household expenditure of the people of the country like food, rent, medical expenses and such household expenses are included in it but new house is not included in it.

I: Investment(Total Investment)

Here I mean investment, which is called total investment, the total expenditure made by all institutions on goods and services within the domestic borders of the country is called total investment.

G: Government Spending

Here G means Government Spending, which is called Government Expenditure, which includes all types of expenses made by the government such as investment made by the government, salaries of all types of government employees, buying arms and so on.

X: Export

Here X means Export, which is called export, in which the production of goods and services in the country is prepared for the consumption of another country, which is included in GDP.

M: Import(Import)

Here M means Import, which is called import , by import, we see those goods and services which have not been produced within the borderline of our country and we deduct imports while calculating GDP.

GDP Formula And Calculate Formula

GDP(GDP)=Consumption+Total Investment+Government Spending+{Export-Import}

Types of GDP

1. Real GDP

GDP is calculated by keeping the prices fixed in a base year in real GDP. There is no change in value in this GDP. Real GDP is also known as calculation of GDP at constant price Let us tell you that currently the base year of India is 2011-12 but CSO (Central Statistical Organisation) on changing this base year to 2017-18 is considering.

2. Nominal GDP

Nominal GDP is the GDP in which GDP is calculated on the basis of current market prices and not on the basis of the fixed price fixed by the Central Statistical Organization, if we talk about economic development, then the real GDP of the country as compared to the nominal GDP. Shows economic growth correctly.

List of top 5 GDP countries in the world

2020 became the year of India's progress when India has surpassed UK and France to move from seventh place to fifth position and it is really a matter of happiness for the people of India, so let us now know which country it is. Whose GDP is the highest in the world and who is on top.

1. United States

The US economy has remained in the first place in the world in terms of GDP since 1981 and is the largest economy in the world, which you can estimate in such a way that only about one fourth of the world's economy is of America's GDP. The GDP of America in 2018 was $ 20.58 trillion and in 2020 the GDP of America is estimated to go up to $ 22.32 trillion.

2. China

In 1980, China was the world's seventh largest economy, but today China is the second largest economy in the world, which is growing rapidly because China exports to most of the world's countries, as of 2018 China's GDP was $ 13.37 trillion.

3. Japan

Japan is the third largest economy in the world, which has crossed the $5 trillion mark. Japan is also a country rich in natural resources, its GDP is 70.9% of the service sector, 29.7% of the industry sector and 1% of the agriculture sector. Japan's GDP in 2019 was $5.15 trillion.

4. Germany

Germany is the fourth largest economy in the world and the most powerful economy in Europe. Germany leads in the production of iron, steel, coal, machinery tools, chemicals, automobiles. Its GDP as of 2019 was $3.86 trillion.

5. India

India's economy is the fifth largest economy in the world and Prime Minister Narendra Modi has said that India's GDP will reach 5 trillion. Agriculture, milk production, animal husbandry are abundant in India as well as it is textile, chemical, steel and India is one of the largest producers of mining, accounting for 16.8% of GDP, and 28.9% on industry, India's GDP in 2019 was $2.94 trillion.

Difference Between GDP and GNP

When we talk about GDP, we get to hear another word GNP, which many people get confused about GDP and GNP.

GDP is gross domestic product whereas GNP is gross national product. In simple language, GDP does not have any meaning about who is producing because GDP only sees whether the production is happening within the country's borders or not but GNP ensures that the production is done by the citizens of the country. be by

We told this because without knowing about GNP, our information about GDP remains incomplete, so we have tried to clear the concept of GDP and GNP in very simple language.

So friends, we hope that now you people have got all the information about what is GDP and GDP Full Form and who is the top GDP country, as well as you must have got to know about GNP as well.

Since we are a responsible citizen of India and the progress of any country is the responsibility of the people of that country, so it is important for us to know what is the current situation of India in terms of GDP and how was the situation in the past and the time to come. What is expected is important.