Introduction of GDPIntroduction of GDPThe gross domestic product is one of the measure ofThe gross domestic product is one of the measure ofnational income and output for given country’snational income and output for given country’seconomy.It is defined as total money value produced ineconomy.It is defined as total money value produced indomestic territory of country during a year. Domesticdomestic territory of country during a year. Domesticterritory does not mean only geographical bondaries ofterritory does not mean only geographical bondaries ofeconomy.it is defined to include the following:-economy.it is defined to include the following:-• Territory lying within the political frontiers,includingTerritory lying within the political frontiers,includingterritorial water of country.territorial water of country.• Ships and aircraft operated by the resident of country.Ships and aircraft operated by the resident of country.• Oil and natural gas and floating platform operated by theOil and natural gas and floating platform operated by theresidentes of the country .residentes of the country .G.D.P= C+G+I+(X-M)G.D.P= C+G+I+(X-M)
Types of GDPTypes of GDPThe following types of gdp:-The following types of gdp:-• Gross domestic product at current pricesGross domestic product at current pricesand constant pricesand constant prices• Gross domestic product at market price.Gross domestic product at market price.• Gross domestic product at factor cost.Gross domestic product at factor cost.
GDP at constant prices and current pricesGDP at constant prices and current pricesWhen the privailing prices are used forWhen the privailing prices are used formeasuring gdp,we call it gdp at current price butmeasuring gdp,we call it gdp at current price butwhen we use the prices of some base year forwhen we use the prices of some base year formeasuring the value of gdp, we call it gdp atmeasuring the value of gdp, we call it gdp atcontant price.contant price.
GDP at market priceGDP at market price• According is Dernburg ”Gross domesticAccording is Dernburg ”Gross domesticproduct at market price is defined as theproduct at market price is defined as themarket value of the output of final goodsmarket value of the output of final goodsand services produced in the domesticand services produced in the domesticterritory of a country by all the producersterritory of a country by all the producersduring an accounting year.”during an accounting year.”
Different types of GDP at M.PDifferent types of GDP at M.PProduct method Expenditure method Income methodProduct method Expenditure method Income methodCCGGIIX-MX-MCCGGIIX-MX-MNet indirect taxNet indirect taxDeprecationDeprecationMixed incomeMixed incomeProfitProfitInterestInterestRentRentCompensation ofCompensation ofemployeesemployees
GDP ATGDP AT MARKETMARKET PRICEPRICEg.d.p at market price=g.n.p at market price-net factor income from abroadg.d.p at market price=g.n.p at market price-net factor income from abroadFollowing data of indian economy.Following data of indian economy.Rs.croreRs.croreCompensation of employees 49651Compensation of employees 49651Interest 10209Interest 10209Rent 4794Rent 4794Profit and dividends 6926Profit and dividends 6926Mixed income 50416Mixed income 50416Indirect tax 20092Indirect tax 20092Subsidy 3161Subsidy 3161Depreciation of capital 9751Depreciation of capital 9751Net factor income from abroad 7Net factor income from abroad 7G.D.P at market priceG.D.P at market price = 148671-7= 148671-7138920138920
GDP at factor costGDP at factor costAccording is Hanson ” Gross domestic product atAccording is Hanson ” Gross domestic product atfactor cost is the sum of net value added by allfactor cost is the sum of net value added by allthe producers in domestic territory of the countrythe producers in domestic territory of the countryand the consumption of fixed capital during anand the consumption of fixed capital during anaccounting year.”accounting year.”
GDP at factor costGDP at factor costG.D.P of factor cost=g.d.p of market price-G.D.P of factor cost=g.d.p of market price-Net indirect taxNet indirect tax=14878-(20092-3161)=14878-(20092-3161)=131747 cr.=131747 cr.