India’s GDP & Economic Growth Rate 2017-2018
The economic growth of a country can be measured in terms of the increase in size of the economy of the nation. Gross Domestic Product (GDP) is used to measure the economic activity of a country.
What is GDP?
- GDP is the sum of all the expenditures of a country i.e. it can be defined as the sum of market values, prices of all final goods and services produced in an economy during a period of time like a year or a quarter of a year.
- GDP is important because it is the perfect procedure to measure the growth of an economy in a country. Every year the GDP is calculated in respect to the previous year.
There are three different ways of calculating GDP, These are as follows:
- This method is based on the total production of a country during a year. Firstly, production units are classified into primary, secondary and tertiary sectors. Then the various units that come under these sectors are identified. The goods and services produced in each of these sectors are then estimated. The sum total of products produced in this three sectors is the total output of the nation. The next step is to find out the value of these products in terms of money. The money send by indian citizens working abroad is also added to this. Now we get the gross national income.
- GDP= Money value of total goods and services + income from abroad.
- Factors of production together produce output and income. The income received by the factors of production during a year can be obtained by adding rent to land, wages to labor, interest to capital and profit to organizations. This will be equal to the income of the nation. In other words total income is equal to the reward given to various factors of production. By adding the money send by the indian citizens from abroad to the income of the various factors of production, we get the gross national income.
- GDP= Rent + wage + interest + profit + income from abroad
- National income can also be calculated by adding up the expenditure incurred for goods and services. Government as well as private individuals spent money for consumption and production purposes. The sum total of expenditure incurred in a country during a year will be equal to national income.
- GDP= Individual expenditure + Government expenditure
Any one of the above methods can be used for calculating national income.
Production method= Income Method = Expenditure Method
Forecast of India’s GDP Growth in 2017-2018
- The National Council of Applied Economic Research (NCAER- New Delhi, India) has revised its projections for the country's economic growth in 2017-18 to 7.6 percent.
- Reserve Bank of India (RBI-Mumbai, India) has reduced the GDP growth to 6.7 percent from the previous projection of 7.3 % in August 2017.
- International Monetary Fund (IMF-Washington D.C.) reduced the earlier projected GDP growth of 7.2 % by 0.5 percentage points to 6.7 % in 2017.
- Industry body FICCI's(New Delhi, India) latest Economic Outlook Survey has pegged India's gross domestic product (GDP) growth at around 7.4 percent for the fiscal year 2017-18.
- World Bank (Washington DC) has reduced its India GDP growth forecast to 7% for 2017-18 from 7.2% due to disruptions caused by demonetization and GST.
- Crisil(Maharashtra) cuts its GDP growth forecast for India to 7% for 2017-18, down from 7.4% earlier.
- Asian Development Bank (ADB-Manila, Philippines) reduced the GDP forecast of 7.4% from July to 7%.
- HSBC’s (London, UK) report states that India’s economic growth is likely to remain “soft” and the GDP is expected to grow by 6% in April-June, down from 6.1% in the preceding quarter.
- The UN World Economic Situation and Prospects as of mid- 2017 report said India is projected to achieve a 7.3% growth in 2017, a downward revision from the 7.7% forecast for the year made when the report was launched in January.
- The Central Statistics Office (CSO- New Delhi), in its first and second advance estimates, had pegged GDP growth at 7.1 per cent for the last fiscal, and indications are that the economy grew at this rate, if not higher.
- Fitch Ratings (New York, U.S.) has trimmed its forecast for India’s economic growth in 2017-’18 of earlier projected growth in India’s Gross Domestic Product at 7.4% by half a percentage point to 6.9% .
- Organisation for Economic Cooperation and Development (OECD-Paris, France) revised India’s GDP growth rate in 2017-18 to 6.7% from its June forecast of 7.3%.
- India Ratings and Research (Maharashtra) lowered India’s GDP growth forecast to 6.7% from earlier forecast of 7.4% in 2017-18.